An industry previously in long-run equilibrium might experience economic profits for any of the following reasons except when
A)new, cost-saving production technology is developed.
B)new markets open up as trade barriers are reduced.
C)prices of inputs in the production process increase.
D)substitutes for the industry's output cease to be produced.
E)market demand increases.

Question

Quizplus · Accepted Answer

If prices of inputs in the production process increase, the cost of production for firms in the industry will increase, which will reduce profits and may cause some firms to exit the industry. This would not result in economic profits for the industry as a whole.

An Industry Previously in Long-Run Equilibrium Might Experience Economic Profits