In the Long-Run, a Profit-Maximising Firm Will Choose to Exit

question 89

Multiple Choice

In the long-run, a profit-maximising firm will choose to exit a market when:

• A)fixed costs exceed sunk costs
• B)revenue from production is less than total costs
• C)average fixed cost is rising
• D)marginal cost exceeds marginal revenue at the current level of production

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Definitions:

Friedrich Engels

A German philosopher, social scientist, and journalist, who, alongside Karl Marx, co-developed the communist theory.

Capitalistic Economic System

An economic system where trade and industry are controlled by private owners for profit, rather than by the state.

Private Individuals

Non-governmental persons who engage in economic transactions or investments on their own behalf.

Former Soviet Union

A federal socialist state in Northern Eurasia that existed from 1922 to 1991, comprising multiple subnational Soviet republics.