If a competitive industry is neither expanding nor contracting, we would expect
A) total revenue to be zero.
B) economic proﬁts to be zero.
C) total opportunity cost to be zero.
D) more resources to ﬂow to that industry.

Question

Quizplus · Accepted Answer

In a competitive industry, economic profits should be zero in the long run due to the entry and exit of firms. However, total revenue and total opportunity cost may not necessarily be zero. As the industry is not expanding or contracting, there will be no change in the allocation of resources towards the industry. Therefore, option D is incorrect.

If a Competitive Industry Is Neither Expanding nor Contracting, We