What is the theory of contestable markets?

Here in the village of Leysin, Switzerland, there is one firm that sells kebabs. The owner of this restaurant therefore has a monopoly on the sale of kebabs on this mountain. So why can't he produce where MC = MR to achieve abnormal profits by restricting output and charging high prices like a typical monopoly? Short answer: the theory of contestable markets. Because barriers to entry / exit are low for kebab shops, it is very possible that a competitor from the village or the valley will open his/her own kebab shop to start competing away some of the original owner's profits. For this theory to work, there must be low barriers to entry and exit. Therefore, this seeming monopolist must assume more competitive behavior to avoid the kebabs sharks that are looming in the area.