Question

Assume that the market for soybeans is purely competitive. currently, firms growing soybeans are experiencing economic profits. in the long run, we can expect:

Answer 1

In the long run, we can expect: new firms to enter, and the industry’s supply to increase.

The supply would increase as new firms will try and enter the same business and they will be producing soybeans too. We have to assume that these firms have recently found out that growing soybeans will mean an increase in economic profits.