Which of the following most accurately describes the long-run period?
A) The long run is a period of time in which a firm is unable to vary some of its factors of production.
B) In the long run, the firm is able to expand output by utilizing additional workers and raw materials, but not physical capital.
C) The long run is of sufficient length to allow a firm to alter its plant capacity and all other factors of production.
D) The long run is of sufficient length to allow a firm to transform economic losses into economic profits.

Question

Quizplus · Accepted Answer

In the long run, firms are able to alter all factors of production including plant capacity. This allows firms to adjust their operations to changing market conditions and transform losses into profits. Option A is incorrect because in the long run, firms can vary all factors of production. Option B is incorrect because firms can also expand physical capital in the long run. Option D is incorrect because it implies that economic losses can be easily transformed into profits which is not always possible.

Which of the Following Most Accurately Describes the Long-Run Period