Which of the following is FALSE?
A) Long-run average variable costs equal long-run average total costs.
B) Fixed costs increase in the long run.
C) As a firm produces more output, eventually it experiences diseconomies of scale.
D) In the long run, both the amount of capital and labor used by the firm can be changed.
E) In the long run, the firm has no fixed inputs.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with output and are incurred regardless of the level of production. In the long run, all costs become variable as the firm can adjust its inputs. Therefore, fixed costs do not increase in the long run.

Which of the Following Is FALSE