In the Long Run

question 218

Multiple Choice

In the long run:

• A) the firm considers all factors as fixed.
• B) the firm considers all factors as variable.
• C) production choices are more limited than in the short run.
• D) production is always greater than zero.

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Definitions:

Indirect Labor

The wages paid to employees who are not directly involved in the production of goods or services but support the manufacturing process, such as maintenance staff and supervisors.

Work in Process

Inventory that includes goods partially completed in the manufacturing process but not yet ready for sale.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Net Income Column

A financial statement element that shows the difference between total revenues and total expenses of a company.