The Long Run Is a Period of

question 62

Multiple Choice

The long run is a period of

• A) at least one year.
• B) sufficient length to allow a firm to expand output by hiring additional workers.
• C) sufficient length to allow a firm to alter its plant size and capacity and all other factors of production.
• D) sufficient length to allow a firm to transform economic losses into economic profits.

---

Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Revenues

The gross increase in owner’s equity resulting from business activities entered into for the purpose of earning income.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Nonfinancial Information

Data that relates to the operational, environmental, and social aspects of a business, which cannot be easily quantified in monetary terms.