If economic profits in a particular industry increase, then we would expect
A)resources to be diverted away from that industry.
B)firms in that industry to produce less output.
C)firms to enter that industry, thus expanding it.
D)consumers to buy less from that industry.

Question

Quizplus · Accepted Answer

When economic profits in an industry increase, it signals to potential new entrants that there are opportunities for profit. As a result, firms are likely to enter the industry, leading to its expansion.

If Economic Profits in a Particular Industry Increase, Then We