A firm should exit an industry if price is less than average cost.

Name: A firm should exit an industry if price is less than average cost.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the price is less than the average cost, the firm is not able to cover its costs and make a profit. Continuing in the industry under these conditions would lead to financial losses, which is not sustainable in the long run. Therefore, it is advisable for a firm to exit the industry in such a scenario.

A Firm Should Exit an Industry If Price Is Less