Which of the Following Is Most Likely a Long- Run

question 74

Multiple Choice

Which of the following is most likely a long- run decision for a firm?

• A) The amount of inventory to stock.
• B) The price at which to sell the product.
• C) The hours a store should stay open.
• D) How many warehouses to build.
• E) The number of workers to hire.

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Definitions:

Substitution Effect

The change in quantity demanded as consumers switch to or from alternatives when the price changes.

Labor-Leisure Framework

A model in economics that illustrates the trade-off between labor, supplying work for income, and leisure, the time spent not working.

Equilibrium Wage

The wage rate at which the supply of labor matches the demand for labor, leading to an equilibrium in the labor market.

Competitive Labor Market

A market where numerous buyers (employers) and sellers (workers) exist, leading to wages derived from supply and demand conditions.