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

Question

Quizplus · Accepted Answer

An improvement in education that increases the quality of the economy's labour force is a very-long-run consideration that could change a firm's production function, as it could lead to an increase in productivity and a shift towards better technologies and methods of production. The other choices (size of the plant, increasing returns to scale of operation, diminishing returns, and rising cost of the factors of production) are factors that can affect a firm's production function, but they may not necessarily be considered very-long-run considerations or have as profound effects as improvements in education.

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