When Firms Exit a Perfectly Competitive Industry, the Market Supply

question 217

True/False

When firms exit a perfectly competitive industry, the market supply curve shifts to the left.

---

Definitions:

Average Variable Cost

The cost of variable inputs (e.g., raw materials and labor) divided by the total output, showing how variable costs change with output levels.

Market Price

The existing rate at which a service or asset is available for purchase or sale in the market.

Marginal Cost

The financial charge for creating one additional unit of a product or service.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the cost of producing one more unit.