Long run adjustments? If firms are price takers but there are barriers to entry, profits will persist If the industry is perfectly competitive firms are not only price takers but there is free entry Other greedy capitalists, enter the market Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Long Run Adjustments? • If firms are price takers but there are barriers to entry, profits will persist • If the industry is perfectly competitive, firms are not only price takers but there is free entry  Other “greedy capitalists” enter the market