In the long-run, a profit-maximising firm will choose to exit a market when:

Question

Quizplus · Accepted Answer

A profit-maximising firm will only stay in a market as long as it is making a profit. If revenue from production is less than total costs, then the firm is not making a profit and will eventually exit the market in order to avoid further losses. A and C are not necessarily indicators for exiting a market, while D is a short-run decision and doesn't necessarily imply that the firm should exit the market in the long-run.

In the Long-Run, a Profit-Maximising Firm Will Choose to Exit