The Long Run Refers to a Time Period

question 209

Multiple Choice

The long run refers to a time period

• A)during which a firm is able to purchase all of its inputs, including its plant and equipment.
• B)long enough for a firm to vary all of its inputs, to adopt new technology, and change the size of its physical plant.
• C)long enough for a firm to pay all of its creditors in full.
• D)long enough for a firm to change the use of its variable inputs.

---

Definitions:

Zero Coupon Bond

A debt security that does not pay interest but is traded at a deep discount, offering profit at maturity when it is redeemed for its face value.

Face Value

The nominal value printed on a financial instrument like a bond or stock certificate, not necessarily its market value.

Interest Rate

The interest rate is the proportion, typically expressed as a percentage, at which interest is paid by borrowers for the use of money that they borrow from a lender.

Present Discounted Value

The immediate value of a forthcoming sum of money or cash flow streams, discounted at a specific rate of return.