Barriers to exit are
A)the non-recoverable costs of quitting or scaling down capacity in an industry.
B)legal restrictions which prevent a firm from leaving an industry.
C)the opposite of barriers to entry.
D)of no consequence if you don't plan to leave the industry.

Question

Quizplus · Accepted Answer

Barriers to exit refer to the costs incurred by a firm when it exits an industry. These costs can include non-recoverable expenses such as investments in assets that have no resale value or closing down plants, laying off employees, and paying termination benefits. Legal restrictions can also make it difficult for firms to leave an industry, but these are not the only type of barrier to exit. In contrast, barriers to entry are obstacles that prevent new firms from entering an industry. Barriers to exit are relevant even if a firm does not plan to leave the industry, as they affect a firm's strategic choices and overall profitability.

Barriers to Exit Are