If competitive industry Z is making substantial economic profit, output will
A)fall in industry Z and firms will likely leave the market.
B)fall in all industries except industry Z.
C)expand in industry Z, as more resources will move to that industry.
D)expand in industry Z, but no new firms will enter the market.

Question

Quizplus · Accepted Answer

When an industry is making substantial economic profits, it attracts new firms and resources to that industry, leading to an expansion in output as more firms enter the market to capitalize on the high profits.

If Competitive Industry Z Is Making Substantial Economic Profit, Output