The long-run marginal cost (LMC) is the increase in the cost incurred by the firm when producing one additional unit of output, holding
A) neither the workforce nor the production facility constant.
B) the workforce and the production facility constant.
C) the workforce constant.
D) the production facility constant.

Question

Quizplus · Accepted Answer

In the long run, all factors of production, including the workforce and production facilities, are variable. Therefore, the long-run marginal cost (LMC) does not hold either the workforce or the production facility constant; instead, it allows for the adjustment of all inputs to achieve the desired level of output.

The Long-Run Marginal Cost (LMC) Is the Increase in the Cost