Question
Short run profits attract resources to industries in the long run resulting in their expansion. True False
Answer
4.1
(196 Votes)
Rhoswen
Master · Tutor for 5 years
Answer
True
Explanation
This statement is discussing a concept in economics related to market dynamics and resource allocation. In the short run, if a particular industry is profitable, it tends to attract resources. These resources could be in the form of capital, labor, or other inputs necessary for production. This influx of resources can lead to the expansion of the industry in the long run. However, it's important to note that this is a simplified view of the market dynamics. In reality, other factors such as barriers to entry, market competition, regulatory environment, and technological changes can also influence the allocation of resources and the expansion of industries.