An industry is in equilibrium at a price and output at which its market demand equals its market supply. When an industry is in equilibrium, all its firms are supposed to be in equilibrium, and earn only normal profits. This is so because under the conditions of perfect competition, all the firms are assumed to achieve the same level of efficiency in the long-run. Since industry yields only normal profits, there is no incentive for new firms to enter the industry, or existing ones to leave it.
