Which of the following is TRUE for a firm in the long run?
A) Variable costs will initially increase and then decrease.
B) The law of diminishing marginal product holds.
C) All costs are variable costs.
D) Variable costs will equal marginal cost at all output levels.

Question

Quizplus · Accepted Answer

In the long run, all costs are considered variable because firms have the flexibility to adjust all inputs. Fixed costs, such as buildings and machinery, can be altered in the long run, making all costs variable.

Which of the Following Is TRUE for a Firm in the Long