Which of the Following Is TRUE for a Firm in the Long

question 152

Multiple Choice

Which of the following is TRUE for a firm in the long run?

• A) Variable costs will initially increase and then decrease.
• B) The law of diminishing marginal product holds.
• C) All costs are variable costs.
• D) Variable costs will equal marginal cost at all output levels.

Recognize the role of concept testing in evaluating new product ideas.

Learn the importance of licensing, R&D consortia, and collaborations in product development.

Understand the concept of reverse engineering and its legality and ethical considerations.

Comprehend the strategies for choosing test market locations and the significance of geographical diversity in test marketing.

---

Definitions:

Interest Rate Implicit

The interest rate in a lease that, when applied to the lease payments, discounts them to equal the fair value of the leased asset.

Direct Financing Lease

A lease agreement where the lessor purchases an asset and leases it out, effectively providing financing to the lessee without transferring ownership.

Net Investment

The total amount spent on buying fixed assets, minus any sales of these assets.

Dealer Profit

The difference between the price at which a dealer sells a good and the cost incurred to buy or produce that good, essentially the dealer's earning from the transaction.