Suppose a typical firm in a particular industry is making positive economic profits. These economic profits
A) reflect a waste of society's scarce resources and reflect inefficient production.
B) signal owners of factors of production to move their resources out of that industry.
C) imply that accounting costs are greater than economic costs in this industry.
D) signal owners of factors of production to move resources into this industry.

Question

Quizplus · Accepted Answer

Positive economic profits indicate that the firm is earning more than the normal return on its resources, signaling that the industry is attractive for investment, encouraging more resources to enter the industry.

Suppose a Typical Firm in a Particular Industry Is Making