In the Long Run, a Firm Should Exit the Industry

question 16

Multiple Choice

In the long run, a firm should exit the industry if:

• A)price is greater than average variable cost.
• B)price is less than average variable cost.
• C)price is greater than average total cost.
• D)price is less than average total cost.

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Definitions:

FOB Shipping Point

FOB Shipping Point is a delivery term that means the buyer takes ownership and responsibility for the goods once they leave the seller's premises.

Damages

Monetary compensation claimed by a person or provided by a court as a remedy for a wrong or injury caused by another's act or default.

Goods

are tangible products or commodities that are produced or manufactured for sale.

Cost of Goods Available

Cost of Goods Available represents the total cost of merchandise available for sale during a certain period, including the beginning inventory plus net purchases.