When perfectly competitive firms in an industry are earning positive economic profits, how does this impact market equilibrium and the long-term sustainability of the industry?

When perfectly competitive firms in an industry are earning positive economic profits, it attracts new firms to enter the market, increasing competition. This leads to a decrease in prices and profits until they reach a long-term equilibrium where firms earn normal profits. This process ensures the long-term sustainability of the industry by preventing excessive profits and encouraging efficiency.