Which of the Following Statements Is Correct

question 76

Multiple Choice

Which of the following statements is correct?

• A)A firm can operate in either the short run or the long run.
• B)While a firm's plant size could be too small in the long run,its size cannot be too small in the short run.
• C)A firm can enjoy economies of scale in either the short run or the long run.
• D)While a firm can plan as if it is in the long run,it can operate only in the short run.

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Definitions:

Production Increase

An increment in the amount of products manufactured by a company during a specified period.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in decision-making.

Product Costs

Costs that are directly associated with the production of goods or services, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to the production of goods and are therefore expensed in the period they occur, such as selling and administrative expenses.