Question: Each of the following passages contains a single argument. Using the letters "P" and "C," identify the premises and conclusion of each argument, writing premises first and conclusion last. List the premises in the order in which they make the most sense (usually the order in which they occur), and write both premises and conclusion in the form of separate declarative sentences. Indicator words may be eliminated once premises and conclusion have been appropriately labeled. The exercises marked with a star are answered in the back of the book.

Profit serves a very crucial function in a free-enterprise economy, such as our own. High profits are the signal that consumers want more of the output of the industry. High profits provide the incentive for firms to expand output and for more firms to enter the industry in the long run. For a firm of above-average efficiency, profits represent the reward for greater efficiency.