If an industry earns a return on capital in excess of its cost of capital:

If an industry earns a return on capital in excess of its cost of capital:

It will soon attracts the attention of competition authorities

Workers will push for higher pay and benefits causing the level of profitability to fall

It will attract the attention of potential entrants and, unless protected by high barriers to entry, the return on capital will fall

Firms within the industry will over-invest causing the return on capital to fall