Which of the following statements is true?

Question

Quizplus · Accepted Answer

In the short run, the number of firms in the industry is typically fixed due to barriers to entry. However, in the long run, firms can enter or exit the industry, leading to potential changes in the number of firms. Choice B is incorrect as free entry and exit typically occurs in the long run, not the short run. Choice C is also incorrect as the relationship between short-run and long-run average cost curves varies depending on the industry and firms in question. Choice D is incorrect as the short run typically involves fixed factors of production, while the long run involves variable factors.

Which of the Following Statements Is True