A Firm Should Exit the Industry If Which of the Following

question 85

Multiple Choice

A firm should exit the industry if which of the following conditions apply?

• A) TR > TC
• B) P < AC
• C) Lifetime expected profit is positive.
• D) Prices are low now but expected to rise.

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Definitions:

Capitalistic Economy

An economic system characterized by private ownership of the means of production and the creation of goods or services for profit.

Government Policies

Strategies and decisions made by governmental bodies to govern social, economic, and environmental matters affecting the nation or region.

Money Supply

The cumulative total of all money assets within an economy at a particular point in time.

Constant Rate

A fixed rate of change, meaning something increases or decreases at a steady and unvarying speed or value over time.