Economic - The firm and Market Strucure

CFA Level I Economics
#1

Can anyone explain why the answer is B and not C. If the supply shifts to the right that means the Total Revenue is less than the Total Cost, which resulted to economic loss.

Which of the following is most likely the long-term adjustment in a perfectly competitive industry that is characterized by firms incurring economic losses?
A. Equilibrium price will decrease.
B. Some existing firms will exit the market.
C. The industry supply curve will shift downward and to the right.

#2

In a perfectly competitive industry, economic profits and losses are eliminated because a huge number of firms produce homogeneous products. If firms are ‘incurring economic losses,’ then there are too many firms producing too much output. The result is that some existing competitors, probably the least-efficient ones, will leave that particular market because of their inability to compete successfully.