Assume the market for ball bearings is purely competitive. Currently, each of the firms in this market is earning positive economic profits. In the long run, as adjustments occur in the industry, we can expect the market price of ball bearings to

Respuesta :

Answer:

Prices will fall

Explanation:

You didn't put the alternatives, but I'm an economist and I can help you.

In a competitive market, as long as there is positive economic profit there will be stimulus to the entry of new competitors. This means that prices are attractive to suppliers.

In the long run, however, increasing the number of suppliers will cause the price to fall - due to the law of supply and demand - until the economic profit of the market is zero. At this point, the market will be in balance and there will be no further incentives for new suppliers to enter the market.