If there are above-normal short run profits in an industry, there will be:
A) entry.
B) exit.
C) no entry or exit.
D) below-normal profits in the next period.

Question

Quizplus · Accepted Answer

Above-normal short run profits in an industry indicate that there is a high demand for the products or services being offered, and thus new firms will enter the industry in order to share in the profits. Thus, the entry is the best choice.

If There Are Above-Normal Short Run Profits in an Industry