Suppose a firm is considering producing zero units of output. We call this exiting an industry in the short run and shutting down in the long run.

Question

Quizplus · Accepted Answer

Exiting an industry refers to a long-term decision where a firm decides to cease operations permanently, while shutting down refers to a short-term decision where a firm stops production temporarily but can resume in the future.

Suppose a Firm Is Considering Producing Zero Units of Output