Option 4: (C), (B), (D), (A) -> This represents the correct sequence of events in perfect competition when supernormal profits exist. The logical flow is: (C) Initially, firms earn supernormal profits at the prevailing market price → (B) This attracts new firms to enter the market due to free entry → (D) As new firms enter, market supply increases (supply curve shifts rightward) while demand remains unchanged → (A) The increased supply causes market price to fall until firms earn only normal profits, eliminating the incentive for further entry. This sequence demonstrates the self-correcting mechanism of perfect competition where supernormal profits are temporary and the market moves toward long-run equilibrium with normal profits. -> correct