When Firms Exit an Industry

question 86

Multiple Choice

When firms exit an industry,

• A)firm profits typically fall.
• B)market supply decreases, pushing market price higher.
• C)market supply decreases, decreasing the firm's output price.
• D)demand decreases and economic profits continue to decline.
• E)market supply decreases, increasing price and bringing firms back into the industry.

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Definitions:

Office Equipment

Assets used in an office environment to facilitate operations, such as computers, printers, and furniture, which are subject to depreciation.

Cash Proceeds

The amount of money received from transactions such as sales, financing, or the sale of assets.

Amortization

Amortization is the process of spreading the cost of an intangible asset over its useful life, similar to depreciation but for non-physical assets.