Concept:Free entry and exit of firms in perfect competition push profits to normal in the long run.
Explanation:When existing firms earn attractive supernormal profits, new firms are attracted into the industry.
More firms enter, so market supply increases.
This causes the market price to fall.
Lower price reduces each firm’s profit until it reaches zero economic profit, which is break-even.
If firms were making losses, some would exit, supply would fall, and price would rise back to break-even.
Therefore, long-run break-even happens because more firms can enter due to attractive profits.
Option A is wrong because there are no entry barriers like copyright laws in perfect competition.
Options C and D do not explain the long-run entry and exit process.
Answer:B. More firms can enter the industry due to attractive profits.