[SmartJerry]

Excessive profits are actually the catalyst for competition. THe cycle of capitalism and free markets looks like this: earn excess profits -> people build more supply -> prices come down and excess profits dry up -> people stop building -> earn excess profits. When you fix the 'prices come down and excess profits dry up' all you get is people stop building.

[medvezhenok]

That works in a well functioning, liquid market. If there are barriers to entry for new competitors (like regulatory hurdles, or zoning), this free-market theory falls flat on its face.

[nilsbunger]

The free market theory still works with the barriers, it’s just that the “excess profits” have to get even higher before someone steps in to build.