Competition in the Long Run: The basic story of the long-run adjustment in a perfectly competitive market is straightforward.  If short-run profits are positive, new firms enter the market in the long run and profits are eroded.  If short-run profits are negative, then some existing firms exit the market and the losses are eliminated.  The market reaches a long-run equilibrium when there is no entry or exit, which only happens when profits are zero.  The most common sticking point for students in this story is that they forget that zero profit is not as bad as it sounds.  Since all costs represent opportunity costs of all explicit and implicit inputs to the production process, zero profit is synonymous with a ‘normal’ rate of return.  There are a few potential complications if we consider markets that are competitive (in the sense of exhibiting price taking behavior), but not perfectly competitive.  The authors discuss cases where firms differ and markets in which entry is limited.  These results can be presented as part of a broader discussion about the realism of the perfectly competitive model.