Two years ago, a large number of firms entered a market in which existing firms had been earning positive economic profits. By the end of last year, the typical firm in this industry had begun earning negative economic profits. No other events occurred in this market during the past two years.

Explain the adjustment process that occurred last year.

Predict what adjustments will take place in this market beginning this year, other things being equal.

You must make at least two comments on your classmates' posts. Your comments cannot simply be "Yes, I agree." or "No". Explain "Why".