Which of the Following Statements Is Correct? Test Bank: I

Multiple Choice

Which of the following statements is correct? Test Bank: I Topic: The Long-Run Adjustment Process in Pure Competition

A) Economic profits induce firms to enter an industry; losses encourage firms to leave.
B) Economic profits induce firms to leave an industry; profits encourage firms to leave.
C) Economic profits and losses have no significant impact on the growth or decline of an industry.
D) Normal profits will cause an industry to expand.