Question

The profit pool is the total profits earned in an industry along all points of the value chain:

1) pool of assets that is distributed to investors.
2) total profits earned in an industry along all points of the value chain.
3) profits that are accrued when a firm earns above-average returns.
4) total profits that can be divided among the competitors within an industry.

Answer 1

The profit pool is the total profits earned in an industry along all points of the value chain, including individual firms. It can be divided among the competitors within the industry.

Step-by-step explanation:

The profit pool is defined as the total profits earned in an industry along all points of the value chain. It represents the combined profits generated by all the firms operating in the industry. It includes the profits earned by individual firms and can be divided among the competitors within the industry.

For example, in the technology industry, the profit pool would consist of the total profits earned by companies involved in manufacturing, distribution, software development, and other related activities.

It is important to note that the profit pool does not refer to profits that are accrued when a firm earns above-average returns or the profits distributed to investors as a pool of assets.