Exit the market refers to when a firm permanently stops operating in an industry due to various reasons such as low profitability, high costs, or lack of demand for their product.
Related terms
Shutdown Point: The point at which a firm temporarily stops production in the short run due to prices falling below average variable cost, but still exists in the market.
Sunk Costs: Costs that have already been incurred and cannot be recovered if a firm decides to exit the market.
Market Exit Barrier: Factors or conditions that make it difficult for firms to leave an industry, such as high exit costs or specialized assets.