go out of business

[Eartha]

Dear all,

How should I understand "go out of business" underlined in the sentence below?

I think the phrase mean "go bust", however, the meaning seems to be " cut some businesses" in the context below.

Thanks in advance.

Eartha

Theory would suggest that profit margins will revert to the mean over time. If profits are very low then companies will go out of business, improving the competitive position (and thus the margins) of those businesses that survive.

[5jj]

It means that they will cease to continue in business. They may go bankrupt, or they may simply stop trading, because they are making insufficient profit.

[TheParser]

If profits are very low then some companies will go out of business, improving the competitive position of those businesses that survive.

***** NOT A TEACHER *****


Hello, Eartha:

I added the word "some." I believe that it means some businesses will close their doors. Less competition for those companies that

stay open will, of course, mean higher profits for them.

HAVE A NICE DAY!