The demand for coffee increases and coffee producers begin earning economic profits. assume the coffee industry is perfectly competitive. compared to this new situation, in the long run how are the price of coffee and economic profits for coffee producers most likely to change?

The price of coffee will decline in the long run and economic profits will be reduced to zero.

Explanation:

The coffee industry is perfectly competitive. The demand for coffee increases and coffee producers begin earning economic profits.

The economic profits will attract other firms to join the market in the long run. As new firms join the market, the market supply will increase.

This will cause the market supply curve to move to the right. This rightward shift in the supply curve will cause a reduction in the price level.

As price gets reduced, the revenue earned by firms will be reduced as well. This will cause a reduction in economic profits.

The increase in supply and reduction in price and profit will continue until all the economic profits are reduced to zero.

d. all of the above are true.