Economic losses in an industry are a signal that

Question

Quizplus · Accepted Answer

Economic losses in an industry signal that the market demand for the industry's products or services is low, or the costs of production are high. Therefore, some resources will exit the industry until the losses disappear. This will lead to a reduction in the supply of the industry's products or services, which may eventually result in an increase in their price, making the industry profitable again.

Economic Losses in an Industry Are a Signal That