The long run refers to a time period
A) during which a firm is able to purchase all of its inputs, including its plant and equipment.
B) long enough for a firm to vary all of its inputs, to adopt new technology, and change the size of its physical plant.
C) long enough for a firm to pay all of its creditors in full.
D) long enough for a firm to change the use of its variable inputs.
Answer: B
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Which of the following means that the CPI overstates the actual inflation rate?
A) new goods bias B) quality change bias C) outlet substitution bias D) All of the above cause the CPI to overstate inflation.
In the figure above, the factor responsible for the decline in the interest rate is
A) a decline the price level. B) a decline in income. C) an increase in the money supply. D) a decline in the expected inflation rate.