A Perfectly Competitive Market Is in Long-Run Equilibrium

A perfectly competitive market is in long-run equilibrium. If the market demand curve shifts to the left, what do we expect to occur in this market?

A) Negative economic profits will cause firms to exit the market, decreasing price until price equals average total cost.
B) Positive economic profits will attract new firms to the market, decreasing price until price equals average total cost.
C) Negative economic profits will cause firms to exit the market, increasing price until price equals average total cost.
D) Negative economic profits will attract new firms to the market, decreasing price until price equals average variable cost.

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