A long-run adjustment is best represented by
A) a carrot farmer using an extra dose of pesticide to kill insects
B) the owner of a Pizza Hut franchise hiring an extra cook
C) General Electric reducing its employment of electrical engineers
D) Ford building a new plant to assemble automobiles

Question

Quizplus · Accepted Answer

In the long run, firms adjust their production capacities, which can involve significant investments in new facilities or equipment. Building a new plant, as in choice D, is a long-run adjustment because it changes the firm's capacity to produce goods, unlike the short-term adjustments seen in the other options, which involve more immediate operational changes without altering production capacity.

A Long-Run Adjustment Is Best Represented by