... the long run, because where such profits are being made, then new firms can enter the market because of the ease to enter the market as a result of low barriers to entry and low set up costs etc... More firms in the market will result in the profits being competed away. Then linked to that idea means that the threat of competition to monopolistic or oligopolistic firms, means they will have to offer consumers the benefits that they would receive in more competitive market structure, eliminating the possibility of high prices, and taking advantage of the consumer. The increased competition should result in firms becoming more productively efficient. Also the price of the product cannot exceed the marginal cost, and will meet the condition for pareto efficiency. The final feature is that cross subsidization is prevented as, since the firm is only earning normal profits, it will go out ...

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