Which of the following statements is TRUE in the short run?
A)Generally, labor is a variable input.
B)Generally, capital is a variable input.
C)Raw materials are generally considered to be fixed inputs.
D)Whether or not an input is considered fixed is dependent on the price paid for the input.

Question

Quizplus · Accepted Answer

In the short run, firms can adjust the quantity of labor they use more easily than the quantity of capital. Therefore, labor is generally considered a variable input in the short run. Capital, on the other hand, is generally considered a fixed input in the short run because it takes time to build or purchase additional capital goods. Raw materials can be either fixed or variable depending on the specific circumstances. The price paid for an input does not determine whether it is fixed or variable.

Which of the Following Statements Is TRUE in the Short