Fill in the blanks to complete the following statements. “Assume a pe

Fill in the blanks to complete the following statements.

“Assume a perfectly competitive market is initially in long-run equilibrium. In the short run, a decrease in raw materials prices will cause the firm’s average costs to ________. As a result, the profits of existing firms will ________. However, over the long run, this will cause the number of firms in the market to ________, and market price will ________ until firms once again earn a ________.”

ANSWER

decrease; increase; increase; decrease; zero economic profit