In the long run a firm will attempt to
A)minimize average variable costs
B)maximize profits subject to an output constraint
C)minimize total costs subject to an input constraint
D)minimize total costs subject to an output constraint

Question

Quizplus · Accepted Answer

In the long run, a firm is able to adjust its inputs of production, such as labor and capital, to minimize its total costs for a given level of output. Therefore, the firm's objective is to minimize its total costs subject to an output constraint, which is represented by option D. While option B is also a possibility for a firm in the long run, it is subject to a constraint on output, which may limit the firm's ability to maximize profits. Option A is focused only on minimizing variable costs, which is not necessarily the same as minimizing total costs, while option C is focused on minimizing total costs subject to an input constraint, which may not be as feasible or relevant as an output constraint.

In the Long Run a Firm Will Attempt to