If competitive industry Y is incurring substantial losses, output will
A) expand as resources move toward industry Y.
B) contract as resources move toward industry Y.
C) contract as resources move away from industry Y.
D) expand as resources move away from industry Y.

Question

Quizplus · Accepted Answer

If Industry Y is incurring substantial losses, resources are likely to move away from it to industries with better profits. This would lead to a decrease in output and contraction of the industry.

If Competitive Industry Y Is Incurring Substantial Losses, Output Will