In the Long Run, a Firm Will Exit a Competitive

question 10

Multiple Choice

In the long run, a firm will exit a competitive industry if

• A)total revenue exceeds total cost.
• B)the price exceeds average total cost.
• C)average total cost exceeds the price.
• D)Both a and b are correct.

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Definitions:

Dominant Strategy

A strategy in game theory that yields the best outcome for a player, no matter what the other players do.

Natural Gas Fields

Geological formations containing natural gas, a fossil fuel consisting mainly of methane, that can be used for energy production.

Dominant Strategy

A strategy in game theory that is best for a player regardless of the strategies chosen by the other players.

Economic Profit

The disparity between total income and the sum of all expenses, encompassing direct and indirect costs.