Under what conditions will a firm exit a market? Explain
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A firm will exit a market if the profit is negative in the long run. The profit is negative if the total revenue is lower than the total cost. That also happens if the marginal cost is lower than the average cost. To conclude, the firm should exit the market if its marginal cost is lower than its average cost.
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1
Answer:
A firm will exit a market if the profit is negative in the long run. The profit is negative if the total revenue is lower than the total cost. That also happens if the marginal cost is lower than the average cost. To conclude, the firm should exit the market if its marginal cost is lower than its average cost.
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