In a market system, if firms in an industry persistently earn total revenues that are less than total costs, then that industry will
A)have some firms go out of business.
B)attract more resources toward it.
C)experience entry of new firms.
D)get government protection from failure.

Question

Quizplus · Accepted Answer

In a market system, if firms in an industry consistently earn total revenues that are less than total costs, it indicates that the industry is not profitable. As a result, some firms will likely go out of business due to their inability to cover costs and sustain operations. This is a natural market adjustment to eliminate inefficiencies and reallocate resources to more profitable areas.

In a Market System, If Firms in an Industry Persistently