Question

Which of the following conditions may or will cause firms to exit an industry?

A. If price is equal to minimum average total cost, resulting losses will cause firms to leave the industry.
B. If price is more than minimum average total cost, resulting losses will cause firms to leave the industry.
C. If price is less than minimum average variable cost, resulting losses will cause firms to leave the industry.
D. If price is less than minimum average total cost, resulting losses will cause firms to leave the industry

Answer 1

If price is less than minimum average variable cost, resulting losses will cause firms to leave the industry.