How does pure competition industry and the company behave in the long run?

Question

Can new businesses enter in the long run and what is their impact on the industry?

Answer 1

Since there are low barriers to entry in perfect competition, firms can enter and exit the market freely in the long run.  Firms will enter if there are positive profits and exit if there are losses.  More firms will increase the supply and lower the price, and fewer firms will decrease the supply and raise the price.