A very-long-run consideration that could change a firm's production function is
A)rising cost of the factors of production.
B)increasing returns to scale of operation.
C)an improvement in education that increases the quality of the economy's labour force.
D)diminishing returns.
E)size of the plant.

Question

Quizplus · Accepted Answer

An improvement in education that increases the quality of the economy's labour force could lead to a long-term shift in the production function of a firm, as higher-quality labor may be more productive and efficient. The other options, such as rising costs of production factors or diminishing returns, may impact a firm's production function in the short run, but not necessarily over a very-long-run timeline. The size of the plant and increasing returns to scale may also have an impact, but it would depend on the specific circumstances of the firm and industry.

A Very-Long-Run Consideration That Could Change a Firm's Production Function