In the long run,all costs are
A) fixed costs.
B) variable costs.
C) average costs.
D) sunk costs.
E) market opportunity costs.

Question

Quizplus · Accepted Answer

In the long run, all costs become variable costs, as a firm has more flexibility to adjust its inputs and output levels. Fixed costs are those that remain constant regardless of the level of production, and sunk costs are those that have already been incurred and cannot be recovered. Average costs are simply the total cost divided by the number of units produced, and market opportunity costs refer to the cost of taking one opportunity over another. Thus, the best choice is B, as it accurately reflects the nature of costs in the long run.

In the Long Run,all Costs Are