If an industry is highly profitable, it is an indication that:
A) the marginal value of resources is high, and more resources need to flow into the industry.
B) the marginal value of resources is low, and resources need to flow out of the industry.
C) labor and, to a limited extent, capital are being exploited.
D) firms are using high-value inputs to create low-value outputs.

Question

Quizplus · Accepted Answer

If an industry is highly profitable, it indicates that the marginal value of resources is high. This means that the industry is generating significant value from the resources utilized, and there is a need for more resources to flow into the industry to further increase its output and profitability.

If an Industry Is Highly Profitable, It Is an Indication