Far as I understand it, the investment market exists on the edge between actively managed and passively managed funds. Actively managed funds exploit inefficie

Far as I understand it, the investment market exists on the edge between actively managed and passively managed funds. Actively managed funds exploit inefficiencies in the market, but the more active funds there are, the less their returns through competition. Passive funds are wonderful when the market is efficient, but the more passive funds there are, the more inefficient the market, and the more profit active funds can make. This should create a natural equilibrium between active funds and passive funds where the market should "settle" and returns are optimal for both parties. Anyone know how to calculate that?