In a market system, resources will move away from an industry when:
A) Profits of firms in the industry are rising
B) Demand for the industry's product is decreasing
C) The production of output in the industry is rising
D) Profits of firms in other industries are falling

Question

Quizplus · Accepted Answer

In a market system, resources will move away from an industry when the demand for the industry's product is decreasing. This is because it indicates that there is less demand for the goods or services produced by the industry, which will lead to lower revenues and profits. As a result, firms in the industry will have less money to pay for resources, and resource suppliers will seek opportunities in other industries with higher demand and better long-term prospects.

In a Market System, Resources Will Move Away from an Industry