Which of the following is true of the long run?
A)The average fixed cost is higher in the long run than in the short run.
B)All inputs costs are variable in the long run.
C)The firm produces at a higher cost in the long run than in the short run.
D)All inputs to production are kept fixed in the long run.
E)Total costs are greater than variable costs in the long run.

Question

Quizplus · Accepted Answer

In the long run, all inputs costs are variable as the firm has more flexibility to adjust its inputs and production processes. The other choices are incorrect as average fixed cost may decrease in the long run (choice A), the firm may produce at a lower cost in the long run (choice C), all inputs are not fixed in the long run (choice D), and total costs may be equal to or less than variable costs in the long run (choice E).

Which of the Following Is True of the Long Run