As long as economic profits are being earned in an industry, firms will ________ the industry and the supply curve will shift to the ________.
A) enter; right
B) enter; left
C) exit; left
D) exit; right

Question

Quizplus · Accepted Answer

When firms observe economic profits in an industry, it signals that the industry is profitable, attracting more firms to enter. This increase in the number of firms increases the supply of the product, which is represented by a rightward shift in the supply curve.

As Long as Economic Profits Are Being Earned in an Industry