If a firm can adjust its employment of all inputs,then it is
A) experiencing economies of scale.
B) in the long run.
C) off its expansion path.
D) limited only by the capacity of its fixed capital.

Question

Quizplus · Accepted Answer

In the long run, a firm can adjust its employment of all inputs, including fixed capital. This is because in the long run all factors of production are variable. Therefore, option B is the correct answer. Option A is incorrect because economies of scale refer to the cost advantages a firm experiences as it expands production. Option C is incorrect because the expansion path refers to the optimal combination of inputs chosen by a firm to produce a given level of output, and it is not relevant to the question. Option D is incorrect because a firm can adjust its fixed capital in the long run.

If a Firm Can Adjust Its Employment of All Inputs,then