Moderate volume of reading assigned, but I expect you to know all assigned reading. Feel free to disagree with me. Just draw supply and demand curves.
Intersection gives competitive equilibrium price.
Higher-cost producers can't earn a normal rate of return, so they leave the industry. Man dying of thirst pays the same for a glass of water as anyone else. Consider a market with only TWO sellers. Suppose you are one of the firms. Suppose there are other firms that could potentially enter the market if they want.