The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-The law of diminishing return does not apply to a firm in the long run because in this phase:
A)all the factors of production are fixed.
B)there are no fixed factors of production.
C)there are some fixed and some variable factors of production.
D)the producer is required to produce a fixed level of output.
E)the producer can change the level of output only by changing the variable factors, fixed factors remaining unchanged.

Question

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5
 
-The law of diminishing return does not apply to a firm in the long run because in this phase:
A)all the factors of production are fixed. 
B)there are no fixed factors of production. 
C)there are some fixed and some variable factors of production. 
D)the producer is required to produce a fixed level of output. 
E)the producer can change the level of output only by changing the variable factors, fixed factors remaining unchanged.

Quizplus · Accepted Answer

In the long run, all factors of production become variable and can be adjusted to change the level of output. Therefore, there are no fixed factors of production in the long run and the law of diminishing returns does not apply.

The Table Given Below Shows the Average Total Cost of Production