c) Long-run

low barriers to entry and exit → firms easily enter and exit the market → supply fluctuates → firms always make a normal profit in the long-run

short-run = supernormal profit

• attracts new firms

• elastic demand + AR shifts left

• AR = ATC

• price decreases

short-run = loss

• firms leave market

• inelastic demand + AR shifts right

• AR = ATC

• price increases