A firm's marginal and average costs may differ in the long and short run because:
A) in the short run all inputs are fixed.
B) in the long run all inputs are fixed.
C) in the short run all inputs are variable.
D) in the long run all inputs are variable.

Question

Quizplus · Accepted Answer

In the long run, all inputs are variable, allowing firms to adjust all factors of production. This flexibility can lead to differences in how marginal and average costs behave compared to the short run, where some inputs are fixed.

A Firm's Marginal and Average Costs May Differ in the Long