Economics - Perfect Competitive Market - PLEASE?

Question

Farmer Brown produces and sells wheat in a perfectly competitive market. At the current market price of $5 a bushel, she makes an economic profit of $45,000 per year. What do you expect to happen in the market for wheat?

Farmer Brown will produce more wheat next year in order to increase her profit.

More firms will enter this industry causing the market price to fall.

Farmer Brown will leave this industry and return to teaching agriculture at the local state university where she made $65,000/year.

There is not enough information to know.

Answer 1

More firms will enter this industry causing the market price to fall.

Answer 2

At first glance you would think the answer would be the third option.  But, because Farm Brown is making $45,000 in economic profit, that doesn't add the $65,000 in opportunity cost that is already factored in.  So, Farm Brown made $110,000, not too shabby for a wheat farmer.

The answer is the second choice.  More firms will enter until economic profits = 0 in long-run equillibrium.