Economic proﬁts in an industry suggest the industry
A) can earn more proﬁts by increasing product price.
B) should be larger to better satisfy consumers' desire for the product.
C) has excess production capacity.
D) is the size that consumers want it to be.

Question

Quizplus · Accepted Answer

Economic profits indicate that a firm or industry is generating more revenue than the total costs (including opportunity costs). This suggests that there is high demand for the product, and the industry could expand to better satisfy consumer demand, as the existing firms are making more than the normal return on investment.

Economic Proﬁts in an Industry Suggest the Industry