A Firm Should Exit an Industry If

question 151

Multiple Choice

A firm should exit an industry if:

• A) P < MC.
• B) P - AC > 0.
• C) P- AC < 0.
• D) P - AC = 0.

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Definitions:

Special Price Reductions

Discounts offered on goods or services beyond the usual pricing, often to promote sales or clear inventory.

Automakers

Companies involved in the design, development, manufacturing, marketing, and selling of motor vehicles.

Surge Pricing

A pricing strategy that increases the cost of goods or services in response to high demand.

Volume Objective

A goal set related to the quantity of product a company plans to sell within a specified period.