Relative to a monopolized industry, a competitively organized industry is more likely to produce
A) more output, charge higher prices, and earn economic profits.
B) more output, charge lower prices, and earn economic profits.
C) more output, charge lower prices, and earn only a normal profit.
D) less output, charge higher prices, and earn economic profits.

Question

Quizplus · Accepted Answer

Competitively organized industries tend to produce more output and charge lower prices due to competition among firms. These firms typically earn only a normal profit because economic profits would attract new firms into the industry, increasing supply and driving down prices and profits.

Relative to a Monopolized Industry, a Competitively Organized Industry Is