Brown, J. David (contributor); Earle, John S. (contributor) - 2008
(φ). Incumbents may choose
to exit, paying C
x
, which may be negative if the scrap value of the business exceeds the
fixed cost of …. Increases in C
e
and C
x
tend to reduce entry, exit, φ
*
, and the mean φ of
surviving firms. An increase in C
I
reduces …. Effectively, all the adjustment costs discussed above would be
extremely high, with C
e
and C
x
both close to infinite …