In a perfectly competitive market profit attracts entry.

Name: In a perfectly competitive market profit attracts entry.
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Question

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In a perfectly competitive market, there are no barriers to entry, so if there are profits being made, new firms will enter the market in order to take advantage of those profits. This increased competition will eventually eliminate the profits, resulting in a situation where firms earn only a normal rate of return.

In a Perfectly Competitive Market Profit Attracts Entry