Table: Constant Cost Industries as of July 2011, Oil

question 164

Multiple Choice

Table: Constant Cost Industries As of July 2011, oil companies had a 6.5 percent profit margin (for each dollar of sales, 6.5 cents was profit) , ranking 131 (profit margin is the far right column) . Other industries making the same profit margin include packaging and containers, office supplies, farm and construction, and newspapers. If these profits are typical, what does this similar profit margin across very different industries suggest about oil companies' profits?

• A) They are making zero profits.
• B) They are making above-average profits and should expect entry.
• C) They are making above-average profits and should expect no entry or exit.
• D) Nothing because it is the total profits that matter, not profits per dollar of sales.

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Definitions:

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