Which of the Following Explanations Supports the Statement That Long-Run

question 42

Multiple Choice

Which of the following explanations supports the statement that long-run supply curves are likely to be more elastic than short-run supply curves?

• A)Firms are able to adjust fixed inputs in the long-run but not in the short-run.
• B)Firms are able to adjust variable inputs in the short-run.
• C)Firms prefer to hire workers rather than capital.
• D)Firms have more flexibility in the short-run.

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Definitions:

Predetermined Overhead Rate

The predetermined overhead rate is calculated before a period begins and is used to estimate the manufacturing overhead cost to be allocated to individual units of production.

Manufacturing Overhead

Indirect factory-related costs that are incurred when producing a product, including costs related to maintenance, utilities, and equipment depreciation.

Direct Labor-Hours

A measure of the time workers or employees directly spend producing goods or performing services.

Predetermined Overhead Rate

Calculated before the period begins, this rate is used to assign overhead costs to products or job orders based on an activity base.