The long-run expansion path for a firm:
A)is not necessarily linear,but always slopes upward.
B)may be backward-bending,if a firm uses less of one input as output increases.
C)may be backward-bending,if the firm uses more of both inputs as output increases.
D)is always linear,but not necessarily upward-sloping.

Question

Quizplus · Accepted Answer

The long-run expansion path for a firm may be backward-bending if a firm uses less of one input as output increases, which indicates that the relationship between input usage and output is not always linear or upward-sloping. Therefore, option A and D are incorrect. Option C is also incorrect because the definition of a backward-bending expansion path suggests that the firm uses less of one input, not more of both inputs, as output increases.

The Long-Run Expansion Path for a Firm