Comment on the following statement: "When firms are earning positive profits, the industry supply curve will shift to the right."
What will be an ideal response?
The statement is true. When firms in perfectly competitive industries are earning positive profit, there is an incentive for firms to expand their scale of operation and for new firms to enter the industry. Thus, the industry supply will rise.
Economics
You might also like to view...
Who can create valuable output out of idle property?
(a) labor (b) entrepreneurs (c) tenants making rental improvements (d) all of the above
Economics
Unemployment arising from a mismatch of skills is called: a. frictional unemployment. b. structural unemployment. c. seasonal unemployment. d. cyclical unemployment
e. underemployment.
Economics