Which of the Following Can a Firm Do in the Long

question 138

Multiple Choice

Which of the following can a firm do in the long run but not in the short run?

• A)decrease the size of its physical plant
• B)reduce its rate of output by laying off workers
• C)increase its variable costs
• D)increase its use of raw materials

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Definitions:

Smooth Consumption

A concept in economics where individuals prefer to have a stable consumption pattern over time, smoothing out the highs and lows in their spending and consumption.

Future Earnings

The expected amount of money an individual, business, or asset is anticipated to generate in the future.

Behavioral Economists

Specialists in economics focusing on how psychological, emotional, cultural, and social factors influence the economic decisions of individuals and institutions.

Realized Losses

Losses that occur when an asset is sold for less than its purchase price, thereby converting a theoretical loss into an actual loss.