Which of the following statements is true?
A) In the long run, the average cost curve is always downward sloping.
B) In the long run, the quantities of all inputs are fixed.
C) In the long run, the firm's fixed costs are greater than its variable costs.
D) In the long run, all costs are variable costs.
E) In the long run, the total variable cost equals the total fixed cost.

Question

Quizplus · Accepted Answer

In the long run, all costs are variable costs. This means that all costs can be adjusted or changed in the long run, including both fixed and variable costs. The long run is a period of time in which all inputs are variable and a firm can change its production level, scale of operation, and even its technology. As a result, all costs including fixed costs become variable costs in the long run.

Which of the Following Statements Is True