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1. Sometimes, a rm closes and another rm producing or W} buys its capi tal and begins producing. For example, buildings for retail stores frequently

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1. Sometimes, a rm closes and another rm producing or W} buys its capi tal and begins producing. For example, buildings for retail stores frequently change hands as one retail business closes and another opens using the same building. Explain why it may make economic sense for one rm to exit and, at the same time, for another rm to enter. (Hint: Consider the differences in the costs of acquiring the building for the rm now leaving versus the rm now entering.)

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