When an entrepreneur is able to vary all inputs and can therefore seek the optimal combination of inputs from among all possible combinations, the producer will examine a
A) long-run cost function
B) short-run cost function
C) immediate-run cost function

Question

Quizplus · Accepted Answer

When an entrepreneur can vary all inputs and seek the optimal combination, it implies that he/she is considering the long-term costs and benefits of the production process. Therefore, the producer will examine a long-run cost function to determine the optimal combination of inputs to maximize profits.

When an Entrepreneur Is Able to Vary All Inputs and Can