Asked by Parker Murdie on May 23, 2024
Verified
If competitive industry Z is making substantial economic profit, output will
A) fall in industry Z and firms will likely leave the market.
B) fall in all industries except industry Z.
C) expand in industry Z, as more resources will move to that industry.
D) expand in industry Z, but no new firms will enter the market.
Economic Profit
The difference between total revenues and total costs, taking both explicit and implicit costs into account, indicating the additional income over the opportunity cost of capital.
Industry Z
An unspecified sector of the economy, used as a placeholder to discuss economic concepts without specifying an industry.
Output Expansion
The increase in the production of goods or services by a firm or economy over time.
- Recognize the significance of profits and losses in signaling adjustments in resource allocation within the economy.
- Gain insight into the effect of consumer choices and earnings on how resources are allocated and the magnitude of industry sectors.
Verified Answer
Learning Objectives
- Recognize the significance of profits and losses in signaling adjustments in resource allocation within the economy.
- Gain insight into the effect of consumer choices and earnings on how resources are allocated and the magnitude of industry sectors.
Related questions
From Society's Point of View, the Economic Function of Profits ...
If Consumer Desire for Product X Increases,all of the Following ...
In a Market Economy a Significant Change in Consumers' Desire ...
Answer the Question Using the Following Data,which Show All Available ...
In a Market Economy, a Significant Change in Consumers' Desire ...