One of the Main Differences Between the Long Run and the Short

question 39

Multiple Choice

One of the main differences between the long run and the short run is that

• A) the firm can earn a profit.
• B) the firm can operate at a loss.
• C) there are no diminishing returns in the short run.
• D) there are no diminishing returns in the long run.

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Definitions:

Depreciation

A method of allocating the cost of a tangible asset over its useful life, reflecting the loss of value over time due to factors like age, wear and tear, or obsolescence.

Environmental Costs

Expenses associated with the negative effects of business practices on the environment, including cleanup costs, fines, and costs for environmentally friendly operations.

Abnormal Spoilage

Waste or loss in production that exceeds the expected level of spoilage under normal operating conditions.

Private

Pertaining to or owned by an individual or entity not related to the government or public sector.