Refer to the information provided in Figure 9.5 below to answer the question that follows. Figure 9.5
-Refer to Figure 9.5. From the diagram, existing firms in this industry make ________ economic profits, and as long as this continues, ________.
A) negative; new firms will not enter it and existing firms will leave it
B) zero; new firms will not enter it and existing firms will not leave it either
C) positive; new firms will enter the industry and existing firms will not leave it
D) positive; the industry supply curve will shift to the left

Question

Refer to the information provided in Figure 9.5 below to answer the question that follows.  Figure 9.5
-Refer to Figure 9.5. From the diagram, existing firms in this industry make ________ economic profits, and as long as this continues, ________.
A) negative; new firms will not enter it and existing firms will leave it 
B) zero; new firms will not enter it and existing firms will not leave it either 
C) positive; new firms will enter the industry and existing firms will not leave it 
D) positive; the industry supply curve will shift to the left

Quizplus · Accepted Answer

Positive economic profits attract new firms into the industry, as they see an opportunity to earn profits. Existing firms will not leave because they are making profits.

Refer to the Information Provided in Figure 9