Question

Question 1: Why would anyone want to enter a profitable industry knowing that profits would eventually be eliminated by competition?

Answer 1

Because the lure of short-run profits is substantial, and there is the possibility of cost reductions and product improvements, thereby prolonging profits for a while.

Industries are concerned with R&D and marketing departments ensuring that the company uses its assets to remain relevant and meet consumer demands. It's when consumers are no longer willing to pay for the company's product or services, then they're eliminated.

But even then business also has properties which can be sold off and used elsewhere for company transactions.