In the long run competition eliminates differences in profitability between firms.

Question

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Competition creates pressure for firms to improve efficiency and reduce costs, which can lead to the elimination of profitability differences between them. Firms that are less efficient or have higher costs will struggle to compete and may eventually be forced out of the market. Over time, the remaining firms will become more similar in terms of profitability levels. However, it's important to note that this process may not happen quickly or evenly across all industries, and there may still be some variation in profitability levels as a result of factors such as product differentiation, innovation, and market power.

In the Long Run Competition Eliminates Differences in Profitability Between