Why are long-run costs always less than or equal to short-run costs?
a. In the long run, technological change can occur, leading to lower costs over time. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.
b. In the long run, employees are more productive so the firm's costs will be lower. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.
c. In the long run, all inputs are flexible so the firm can minimize all costs. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.
d. In the long run, firms can choose how much output to produce based on demand, which will lead to lower costs. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.
Ans: c. In the long run, all inputs are flexible so the firm can minimize all costs. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.
You might also like to view...
Answer the following statements true (T) or false (F)
1. The simple immigration model suggests that labor migration raises the wage rate in the country of origin while reducing the wage rate in the host country. 2. Remittances by Mexican workers in the United States to their families in Mexico tend to reduce the gains from immigration to the United States and increase it for Mexico. 3. Much of the recent concerns about immigration in the U.S. have focused on green-card holders. 4. The arguments that illegal immigrants do not take away jobs from legal residents, or that illegal immigrants displace legal residents from jobs on a one-to-one basis are both false. 5. At the heart of U.S. immigration laws are immigration quotas. 6. Economic analysis suggests that immigration can either benefit or harm a nation, depending on the number of immigrants, their education, skills, work ethic and the rate at which they are absorbed into the economy.
Contractionary fiscal policy will most likely
A) involve increasing government spending. B) reduce the price level. C) involve cutting taxes. D) raise real GDP.
All of the following would increase the growth rate of the economy EXCEPT
A) raising the saving rate. B) stimulating research and development. C) discouraging international trade. D) None of the above answers is correct because they all would increase the growth rate.
List five major economic activities of government, and give an example of each