A firm that produces and sells furniture gets to choose
A)how many workers to hire in both the short run and the long run.
B)the size of its factories in the short run but not in the long run.
C)which short-run average-total-cost curve to use in both the short tun and the long run.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In the short run, the firm can choose how many workers to hire based on its production needs and the cost of labor. In the long run, the firm can also choose the size of its factories, which will affect its production capacity and costs. The choice of short-run average-total-cost curve will depend on the specific production technology and input prices, but it is not a choice that the firm has full control over in the long run as it is determined by its production function. Therefore, option A is the best choice as it correctly identifies the choices that are available to the firm in both the short run and the long run.

A Firm That Produces and Sells Furniture Gets to Choose