Firms continue to enter the industry until economic profits fall to zero. With free entry, positive economic profits induce new entrants. Why do perfectly competitive firms always make normal profits in the long run. Zero Economic Profits in Long Run Why is there no economic profit for perfectly competitive firms in the long run.
The final outcome is that, in the long run, the firm will make only normal profit zero economic profit. Economic profit means profit after you pay out your explicit AND implicit costs. As new firms enter, the supply curve shifts to the right, price falls, and profits fall.