profit creates an incentive for other perfectly competitive firms to enter the market. (Use one word for the blank.)

The word that fits in the blank is "entry."

In a perfectly competitive market, when existing firms generate profits, it serves as a signal to potential entrants that the market is lucrative. This profitability creates an incentive for other firms to enter the market, leading to increased competition. As new firms enter, the supply of the good or service will increase, which typically drives prices down and reduces the profits of existing firms. Eventually, this process continues until profits are driven down to a normal level, where firms in the industry earn zero economic profit in the long run. This dynamic showcases the self-correcting nature of perfectly competitive markets.