Which of the following statements is true?
A) In the long run, the average cost curve is always downward sloping.
B) In the long run, the quantities of all inputs are fixed.
C) In the long run, the firms' fixed costs are greater than its variable costs.
D) In the long run, all costs are variable costs.

Question

Quizplus · Accepted Answer

In the long run, all costs are variable costs, since in the long run all inputs can be adjusted and none are considered fixed. This includes both variable costs, which change with the level of output, and fixed costs, which can still be adjusted in the long run. Therefore, option D is the only true statement.

Which of the Following Statements Is True