Which of the following explanations supports the statement that long-run supply curves are likely to be more elastic than short-run supply curves?
A)Firms are able to adjust fixed inputs in the long-run but not in the short-run.
B)Firms are able to adjust variable inputs in the short-run.
C)Firms prefer to hire workers rather than capital.
D)Firms have more flexibility in the short-run.

Question

Quizplus · Accepted Answer

In the long-run, firms have more flexibility to adjust their fixed inputs, such as buildings or machinery, which can result in larger changes in supply in response to changes in price. In the short-run, however, these fixed inputs cannot be changed, so firms are limited in their ability to increase supply, resulting in a less elastic supply curve. In the long-run, firms have the ability to adjust all inputs, including fixed inputs, which can lead to greater flexibility and responsiveness to changes in price. Therefore, long-run supply curves are likely to be more elastic than short-run supply curves.

Which of the Following Explanations Supports the Statement That Long-Run