Which of the following is an exit barrier for firms in an industry?
A)Sunk costs
B)Labor agreements or commitments to purchase raw materials
C)Obligations to input suppliers
D)Government restrictions
E)All of the above

Question

Quizplus · Accepted Answer

All of the options listed are examples of exit barriers for firms in an industry. Sunk costs refer to investments that cannot be recovered if a firm leaves the industry. Labor agreements or commitments to purchase raw materials create obligations that the firm must fulfill even if they decide to exit the industry. Obligations to input suppliers and government restrictions can also create costs for exiting a given industry.

Which of the Following Is an Exit Barrier for Firms