As long as existing firms ________ in an industry, new firms will enter the industry, causing the industry ________ curve to shift to the right.
A) earn economic profits; supply
B) break even; demand
C) earn economic profits; demand
D) break even; supply

Question

Quizplus · Accepted Answer

When existing firms in an industry earn economic profits, it signals new firms that there are opportunities for profit, encouraging them to enter the industry. This influx of new firms increases the total quantity of goods or services supplied in the market, shifting the supply curve to the right.

As Long as Existing Firms ________ in an Industry, New