In which of the following cases would a firm exit from a market? A)P short-run ATC. B)P long-run ATC. D)P

Name: In which of the following cases would a firm exit from a market? A)P > short-run ATC. B)P long-run ATC. D)P < long-run ATC.
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Question

In which of the following cases would a firm exit from a market? A)P > short-run ATC. B)P < short-run ATC. C)P > long-run ATC. D)P < long-run ATC.

Quizplus · Accepted Answer

If the price is less than the long-run average total cost (LRATC), the firm will be making losses in the long run. In such a situation, the firm should exit the market to avoid further losses. Therefore, option D is the correct choice.

In Which of the Following Cases Would a Firm Exit