A monopolistic competitor exits the industry in the long run if ________.

Question

Quizplus · Accepted Answer

In the long run, a monopolistic competitor will exit the industry if total costs exceed total revenue. This is because in the long run, firms cannot sustain losses indefinitely and will exit the industry if they cannot cover their costs. Therefore, if total costs exceed total revenue, the firm is operating at a loss and will eventually exit the industry.

A Monopolistic Competitor Exits the Industry in the Long Run