In a firm's planning horizon,the long run refers to
A)a period of one year or more
B)the term to which the current board of directors has been elected
C)the period during which all of the firm's inputs can be varied
D)the period during which at least one of the firm's inputs is fixed
E)the period during which the level of available technology is fixed

Question

Quizplus · Accepted Answer

The long run is defined as the period during which all of the firm's inputs can be varied. This means that in the long run, a firm can adjust its production levels by changing any of the inputs it uses, such as labor, capital, or raw materials. This is in contrast to the short run, where at least one input is fixed and cannot be changed. Therefore, option C is the correct answer. Option A is incorrect because one year may still fall within the short run planning horizon. Option B is irrelevant as it pertains to the governance structure of the firm rather than its planning horizon. Option D is also incorrect because it describes the short run rather than the long run. Option E is incorrect because the level of available technology is not necessarily fixed in the long run, as firms may invest in developing new technologies.

In a Firm's Planning Horizon,the Long Run Refers to