In an industry with free entry and exit,economic profits:
A)indicate a market failure.
B)can never occur.
C)provide incentives for a reallocation of resources out of other industries and into the one with economic profits.
D)can be sustained indefinitely.

Question

Quizplus · Accepted Answer

The incentive to earn profit and avoid loss causes firms to enter profitable markets and exit unprofitable ones.

In an Industry with Free Entry and Exit,economic Profits