Asked by Madison Chrisman on Jun 03, 2024
Verified
The long run is characterized by
A) the relevance of the law of diminishing returns.
B) at least one fixed input.
C) insufficient time for firms to enter or leave the industry.
D) the ability of the firm to change its plant size.
Long Run
A period in which all factors of production and costs are variable, allowing for all adjustments to be made within an economy or firm.
Fixed Input
Inputs used in production that cannot be varied in the short term, such as buildings or machinery.
Plant Size
The physical capacity or dimensions of a manufacturing facility.
- Discern the aspects influencing operational resolutions of a firm in both short-term and long-term scenarios.
- Appreciate the differences between short run and long run in economic theory and their relevance to business strategies.
Verified Answer
SA
Sarah AccettaJun 07, 2024
Final Answer :
D
Explanation :
In the long run, all inputs are variable, allowing firms to change their plant size and adjust their production capacity to meet demand. This contrasts with the short run, where at least one input is fixed.
Learning Objectives
- Discern the aspects influencing operational resolutions of a firm in both short-term and long-term scenarios.
- Appreciate the differences between short run and long run in economic theory and their relevance to business strategies.