Long-run costs of production are generally lower than the short run costs because:
A)all inputs are fixed in the long run.
B)firms cannot change their scale of production in the long run.
C)there is greater flexibility in input usage in the long run.
D)there is no scope for learning by doing in the long run.

Question

Quizplus · Accepted Answer

In the long run, firms have the ability to vary all their inputs, including capital, labor, and technology. This allows them greater flexibility in adjusting their input usage to achieve cost savings. Additionally, in the long run, there is scope for learning by doing as firms have more time to experiment and optimize their production processes. This can lead to further cost savings in the long run. Therefore, the long-run costs of production are generally lower than the short-run costs.

Long-Run Costs of Production Are Generally Lower Than the Short