Long Run Equilibrium Of The Perfectly Competitive Firm:

The existence of positive economic profit in the short-run will encourage new firms to join the industry, especially when there are no barriers to entry.  This process of new entry will persist until the profit of each firm in the industry drops to zero; as a result of excess supply and continuous downward review of price to the level where price (P) equals average total cost (LAC).

In Figure, it is evident that the perfectly competitive firm makes zero economic profit or what is alternatively referred to as normal profit in the long run because total revenue (TR) equals total cost (TC).