The Long Run Is a Time Period That Is

question 225

Multiple Choice

The long run is a time period that is

• A)five years or longer.
• B)long enough to change the amount of labor employed.
• C)long enough to change the size of the firm's plant and all other inputs.
• D)long enough to change the amount of labor employed but not to change the size of the plant.
• E)None of the above answers describe the long run.

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Definitions:

Average Variable Cost

The total variable costs of production divided by the number of units produced, indicating the variable cost per unit.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or production process scales up, contrary to economies of scale where costs decrease.

Boeing

An American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide.