When will that expansion or contraction end?

It will continue indefinitely.

It will end when enough firms exit the market to increase economic profits to zero.

It will end when labor costs become too high.

It will end when enough firms enter the market to reduce economic profits to zero.

b$.$ Assume now that a new technique, technique $4,$ is developed. It combines $2$ units of labor, $2$ of land, $6$ of capital, and $3$ of entrepreneurial ability. With the resources priced as shown in the table, will the firm adopt the new technique?

c$.$ Suppose that an increase in the labor supply causes the price of labor to fall to $$1\mathrm{.}50$ per unit, all other resource prices remaining unchanged. Which technique will the producer now choose?

d$.$ Evaluate this statement: "The market system causes the economy to conserve most in the use of resources that are particularly scarce in supply. Resources that are scarcest relative to the demand for them have the highest prices. As a result, producers use these resources as sparingly as is possible." Does your answer to part $c,$ above, bear out this contention?

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