The firm will not continue to earn profit because the cost of production will rise as new firms enter the market. The supply curve shifts to the right as new firms enter, prices fall, and profits fall. Firms will keep entering the industry until economic profits reach zero .Some businesses will leave a sector if it experiences financial losses. will leave.
As the supply curve shifts to the left, price rise and losses fall. The entry of a large number of new firms causes the market supply curve to shift to the right. As the supply curve shifts to the right, market prices begin to fall, and economic profits for both new and existing firms fall.
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