If an Industry Earns a Return on Capital in Excess

Multiple Choice

If an industry earns a return on capital in excess of its cost of capital:

A) It will soon attracts the attention of competition authorities
B) Workers will push for higher pay and benefits causing the level of profitability to fall
C) It will attract the attention of potential entrants and,unless protected by high barriers to entry,the return on capital will fall
D) Firms within the industry will over-invest causing the return on capital to fall