Theoretically,in a long-run cost function:
A) all inputs are fixed
B) all inputs are considered variable
C) some inputs are always fixed
D) capital and labor are always combined in fixed proportions
E) b and d

Question

Quizplus · Accepted Answer

In a long-run cost function, all inputs are considered variable. This is because in the long run, a firm can adjust all inputs, including both capital and labor, to achieve its desired level of output. Therefore, choice B is the best answer. Choice A is incorrect because in the long run, no inputs are fixed. Choice C is incorrect because while some inputs may be fixed in the short run, in the long run all inputs are considered variable. Choice D is incorrect because while some firms may operate with fixed proportions of capital and labor, this is not a universal feature of long-run cost functions.

Theoretically,in a Long-Run Cost Function