If rival firms can do the same thing, economic profit will be driven to zero.

Name: If rival firms can do the same thing, economic profit will be driven to zero.
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In a perfectly competitive market, where firms can enter and exit freely, economic profit will be driven to zero in the long run. This is because any positive economic profit will attract new firms to enter the market, increasing competition and driving down prices and profits until they reach a level of zero economic profit.

If Rival Firms Can Do the Same Thing, Economic Profit