In a perfectly competitive market, in the long run, arbitrage profits will be bid away.

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In a perfectly competitive market, there are no barriers to entry or exit, and there are many buyers and sellers. This means that any profits that arise from arbitrage opportunities will be quickly exploited by competitors, leading to increased supply and reduced demand, which in turn lowers prices and reduces profit margins. Over time, this process will continue until the arbitrage profits are bid away completely, leading to zero economic profits in the long run.

In a Perfectly Competitive Market, in the Long Run, Arbitrage