We can predict that resources will move into an industry whenever
A) economic profits for firms in that industry are greater than zero.
B) accounting profits for firms in that industry are greater than zero.
C) economic profits for firms in that industry are zero.
D) accounting profits for firms in that industry are zero.
E) economic losses for firms in that industry are minimized.

Question

Quizplus · Accepted Answer

Resources will move into an industry whenever economic profits for firms in that industry are greater than zero, as this means that there is incentive for firms to enter the industry and compete for a share of those profits. Accounting profits may not provide an accurate picture of the overall profitability of the industry, as they do not take into account opportunity costs or the full economic costs of production. Economic losses being minimized would not necessarily lead to an influx of resources into an industry.

We Can Predict That Resources Will Move into an Industry