Exit from a market will stop when

Name: Exit from a market will stop when
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Exit from a market will stop when economic losses are zero. Economic losses take into account both accounting losses and the opportunity cost of capital. When economic losses are zero, it means that the firm is earning just enough to cover the cost of its inputs, including the cost of capital. This is the point at which the firm has no incentive to exit the market, but also no incentive to expand production.

Exit from a Market Will Stop When