A Basic Assumption of the Long Run Is That a Firm

question 47

Multiple Choice

A basic assumption of the long run is that a firm:

• A) cannot change the amount of labor or capital that it employs.
• B) can change the amount of labor and capital that it employs.
• C) can change the amount of capital that it employs but not the amount of labor.
• D) cannot change the amount of capital that it employs but can change the amount of labor.

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Definitions:

Maximum Prosperity

The highest level of economic well-being and wealth generation achievable by an individual, organization, or economy.

Economic Gain

The increase in financial value or benefit that results from an investment or action.

Rational Consideration

The process of systematically evaluating available options based on logic, facts, and objective criteria before making a decision.

Management Approach

Strategies, philosophies, or methods adopted by leadership in governing, directing, and administering an organization to achieve its goals.