A Difference Between the Long Run and the Short Run

question 33

Multiple Choice

A difference between the long run and the short run is that:

• A)a firm is unable to vary some of its factors of production in the short run, while all the factors of production are variable in the long run.
• B)a firm is able to expand output by utilizing additional workers, raw materials, and physical capital in the short run, while it is impossible to hire additional workers or add raw materials to expand output in the long run.
• C)the short run is generally a period of one year, while the long run is a fixed period of 5 years for all firms across industries.
• D)the short run is of sufficient length to allow a firm to transform economic losses into economic profits, while the long run is too short to turn economic losses into economic profits.
• E)sunk costs are incurred in the short run, while they are not incurred in the long run.

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