After a Firm Makes Both Short and Long Run Adjustments

question 5

Multiple Choice

After a firm makes both short and long run adjustments to its production plan following an increase in the output price,

• A)the marginal product of capital will be higher.
• B)the marginal product of labor will be lower.
• C)the technical rate of substitution will be unchanged.
• D)(a) and (c)
• E)(b) and C
• F)(a) and (b)
• G)All of the above.h.We cannot tell for sure -- so none of the above.

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Definitions:

Bankruptcy Proceeding

A legal process in which individuals or entities who cannot pay their debts seek relief through the court system.

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize and restructure their debts.

Debtor Corporation

A business entity that owes money to creditors.

Creditors

Individuals or entities that are owed money by others, usually as a result of extending loans, credit, or services.