The Long-Run Exit Rule Is to Exit the Industry If

question 106

Multiple Choice

The long-run exit rule is to exit the industry if:

• A) P > AVC.
• B) P < AVC.
• C) P > ATC.
• D) P < ATC.

---

Definitions:

Forming Department

A specific department in manufacturing where raw materials begin their transformation into final products through various processes.

Weighted-Average Method

An inventory costing method that assigns costs based on the average cost of all units available during the period.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into the equivalent of full units of output, facilitating consistency in financial reporting and analysis.

Fabricating Department

A division within a manufacturing company dedicated to the construction and assembly of the parts required to produce a finished product.