In the Long Run, a Firm Can Increase Production by

question 27

Multiple Choice

In the long run, a firm can increase production by

• A)increasing variable costs.
• B)increasing capital input.
• C)reducing labor input.
• D)shutting down.
• E)minimizing fixed costs.

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Definitions:

Consumer Surplus

is the difference between the total amount that consumers are willing to pay for a good or service and the total amount that they actually pay.

Market Price

The immediate rate at which an asset or service can be traded in a specific trading place.

Producer Surplus

The gap between what sellers are prepared to accept for a product or service and the real amount they end up getting.

Excess Quantity

The situation where the supply of a product exceeds the demand for it at a specific price point, leading to a surplus.