In the long run, a firm can leave an industry when it experiences persistent losses because:
Correct answer: C. All inputs can be adjusted
- A. All inputs become fixed
- B. All costs become sunk
- C. All inputs can be adjusted
- D. Market demand becomes vertical
Explanation
The long run is a period in which the firm can adjust all inputs and exit the industry. Persistent losses provide an incentive to leave, unlike the short run when some commitments may be fixed. The other options do not define long-run adjustment.
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