If a Firm in a Perfectly Competitive Industry Experiences Persistent

question 71

Multiple Choice

If a firm in a perfectly competitive industry experiences persistent losses, what should it do in the long run?

• A)Shut down temporarily and wait for market conditions to change.
• B)Exit the industry.
• C)Raise its price to cover average total cost.
• D)Continue to operate if it can raise the demand for its product through advertising and quality improvements.