In a perfectly competitive market, a firm can continue to earn positive economic profits in the long run due to the constant entry of new firms into the industry.

In a perfectly competitive market, many firms sell similar products, which makes it easy for new firms to enter the market. When existing firms earn positive economic profits, it attracts new firms to join because they want to share in those profits. However, as more firms enter the market, the supply of the product increases, leading to a decrease in prices. Eventually, the price may fall to the point where firms only earn normal profits, meaning they cover their costs but do not make extra profits. For example, if a bakery is making good profits selling bread, new bakeries will open, increasing bread supply and driving prices down until profits stabilize.