What happens in a perfectly competitive industry, when economic profit is greater than zero?

Question:- What happens in a perfectly competitive industry, when economic profit is greater than zero?

Answer: Specifically, in a perfectly competitive industry, if one gets more than this amount of economic profit, that is, when economic profit is greater than zero, it leads to such specific events. The positive economic profit instils the idea in firms that there is above normal profits to be made hence drawing new players into the industry. This is because group membership, caused by the entry of new players, brings about an increase in the supply of the industry. Specifically, as the supply, manufacture, or availability of services increases, and demand for such services remains constant or gradually decreases, market prices start to decrease. Hence, lower prices lead to a reduction in each firm’s sales and revenues and the slow shrinking of its economic profits. This goes on until economic profits are brought down to zero and the market situation is described as a long-run equilibrium in perfect competition.