Under perfect competition if firms earn supernormal profits. Arrange following statements to arrive at the implication of free entry and exit of firms

(A) Market price fall in such a manner that firms will be earning normal profits only and thus no more firms will have incentive to enter the market.
(B) Some new firms will enter the market
(C) At the prevailing market price, each firm is earning supernormal profit.
(D) Demand remains unchanged but the market supply curve shifts rightward

Choose the correct answer from the options given below:

(C), (B), (D), (A)

The correct answer is Option (4) → (C), (B), (D), (A)

(C) At the prevailing market price, each firm is earning supernormal profit.→ This is the initial situation under perfect competition.

(B) Because of these profits, some new firms will enter the market. → Free entry attracts new firms.

(D) As new firms enter, market supply increases (shifts rightward) while demand remains unchanged. → This leads to a fall in market price.

(A) The market price falls until firms earn normal profit only, removing any further incentive to enter. → This is the final equilibrium condition.