Answer:
Freedom of entry and exit - A firm can enter or leave the industry any time. The free entry and exit of the firm is possible only in the long period, not in the short period. Because of free entry and exit, firms in the long run earn only normal profits. (TR = TC or AT = AC). In case of super normal profits are earned, new firms will get attracted and join the industry. Market supply will increase and extra profit will wipe out. In case of super normal losses, some of the existing firms will leave the industry. Market supply will decrease and hence, price will increase so extra losses will wipe out. In this way firms can earn normal profit in a long run only.
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