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Why cant a firm earn super-normal profit in the long run?

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Question added by Nitin Gupta, ACA , FP&A , Rockwell Automation
Date Posted: 2013/12/03
Mohammad Tohamy Hussein Hussein
by Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

That really depends on your competitive strategies. If you stick to the same product(s) for the same market(s) then profits will normally decline by the effect of the industry's competitive powers. If you are continuously modefying your strategies to handle the industry's competitive landscape, you can earn super-normal profits in the long run.

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

Due to the market forces.when a company earns super normal profit. Being attracted,many market players will join to share the market .As the competition sets in, profit is getting shared,as the market is getting shared.So supernormal profit will not be there in the long run for a firm.

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