The long run is a period of
a. at least one year.
b. sufficient length to allow a firm to expand output by hiring additional workers.
c. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production.
d. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
C
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Why are international investors who have invested in developing nations favoring foreign direct investment and portfolio investment over loans?
A) The process of making loans is usually more difficult for investors to do than foreign direct and portfolio investment. B) The interest rate charged on the loans is usually lower than what can be earned in the U.S. C) It is illegal for banks to make loans to foreign firms. D) Investors have an aversion to owning dead capital and want to make sure that the resources they own do not become dead capital.
Suppose you're in the trucking business and you purchase a $100,000 truck with a one year loan for the full amount. Ignoring interest payments, what is your fixed cost per month?
a. $10,000 b. $20,000 c. $25,000 d. $12,000 e. $8,333