The market for home-delivered pizza is extremely competitive in Introville, Utah, and prices continue to fall. Assume they have fallen so low that the 20 pizza delivery firms are all suffering economic losses. What will likely happen in the long run?

With all firms earning economic losses, we would expect some to exit the industry. As some firms leave, those remaining will find that the demand for their product has increased. Prices will then rise until the firms that remain are earning the normal rate of return.