Asked by Harun Abdullahi on May 17, 2024

verifed

Verified

Exit from a competitive industry will occur until economic

A) losses are driven to zero.
B) profits just offset all accounting losses.
C) costs are sufficiently below accounting losses so that profits are realized.
D) profits are driven to zero.

Economic Losses

Financial losses incurred due to unfavorable business conditions, natural disasters, or other unexpected events that negatively impact the economy.

  • Assess the influence of firm entrance and departure on long-run stability within perfectly competitive arenas.
  • Gain understanding of how economic profits and losses influence equilibrium in the short term and the long term.
verifed

Verified Answer

KA
Keren AlvarezMay 17, 2024
Final Answer :
A
Explanation :
Exit from a competitive industry will occur until economic losses are driven to zero, meaning that firms will leave the industry if they are unable to cover their total costs, including both explicit and implicit costs, until they reach a break-even point where economic profits are zero.