Entrepreneurs shift capital and labor across industries in pursuit of profit. Let’s look at this a little more closely. Suppose there are two industries: a high‑profit industry, Industry H, and a low‑profit industry, Industry L. Answer the following questions about these two industries. a. If the two industries have similar costs, then what must be true about prices in the two industries? Prices in Industry H and Industry L must be equal. must be lower in Industry H than in Industry L. must be higher in Industry H than in Industry L. in Industry H and Industry L cannot be compared.
Entrepreneurs shift capital and labor across industries in pursuit of profit. Let’s look at this a little more closely. Suppose there are two industries: a high‑profit industry, Industry H, and a low‑profit industry, Industry L. Answer the following questions about these two industries. a. If the two industries have similar costs, then what must be true about prices in the two industries? Prices in Industry H and Industry L must be equal. must be lower in Industry H than in Industry L. must be higher in Industry H than in Industry L. in Industry H and Industry L cannot be compared.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter22: Perfect Competition
Section: Chapter Questions
Problem 4QP
Related questions
Question
Entrepreneurs shift capital and labor across industries in pursuit of profit. Let’s look at this a little more closely. Suppose there are two industries: a high‑profit industry, Industry H, and a low‑profit industry, Industry L. Answer the following questions about these two industries.
a. If the two industries have similar costs, then what must be true about
Prices
in Industry H and Industry L must be equal.
must be lower in Industry H than in Industry L.
must be higher in Industry H than in Industry L.
in Industry H and Industry L cannot be compared.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning