Which of the following is correct in reference to the long run?
A)All costs are explicit costs.
B)Both fixed and variable costs exist.
C)All inputs are variable.
D)Only one input is variable while all others are fixed.

Question

Quizplus · Accepted Answer

In the long run, all inputs are variable. This means that a firm can adjust its usage of all inputs, including labor, capital, and raw materials. The concept of fixed costs does not apply in the long run since a firm can adjust its plant size and equipment usage. Similarly, explicit costs (which are out-of-pocket expenses) may still exist, but so can implicit costs (such as opportunity costs). Therefore, C is the correct choice.

Which of the Following Is Correct in Reference to the Long