To determine whether to exit or enter an industry in the long run, a firm looks to the _____ curve at the profit-maximizing quantity.

Question

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In the long run, a firm looks to the average total costs curve at the profit-maximizing quantity to determine whether to exit or enter an industry. This is because if the price (which equals average revenue in perfect competition) is greater than average total costs, the firm can make a profit. If it's lower, the firm would incur losses, suggesting it might exit the industry.

To Determine Whether to Exit or Enter an Industry in the Long