Which of the following can a firm do in the long run but not in the short run?
A)decrease the size of its physical plant
B)reduce its rate of output by laying off workers
C)increase its variable costs
D)increase its use of raw materials

Question

Quizplus · Accepted Answer

A firm can decrease the size of its physical plant in the long run, but not in the short run as fixed resources cannot be easily changed in the short run. In the short run, the firm can only adjust its variable inputs such as labor or raw materials.

Answer: D
 In the long run, a firm can increase its use of raw materials as it has more time to negotiate and secure better deals with suppliers or even invest in its own extraction or production facilities. However, in the short run, the firm is constrained by its existing stock of raw materials and cannot easily increase its use.

Therefore, both options A and D are correct.

Which of the Following Can a Firm Do in the Long