If There Are Normal Short Run Profits in an Industry

question 86

Multiple Choice

If there are 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.

---

Definitions:

Profits

The financial gain realized when the revenue from selling goods or services exceeds the costs, taxes, and expenses involved in its provision.

Efficient Solution

An outcome in which resources are allocated in the most effective manner, maximizing utility or benefit without waste.

Demand Curves

Graphical representations that show the relationship between the price of a good and the quantity demanded by consumers at those prices.

Quantity

The amount or number of units of a product or service.