In the long run ?
Correct answer: B. there are no fixed factors of production
- A. all firms must make economic profits.
- B. there are no fixed factors of production
- C. a firm can vary all inputs, but it cannot change the mix of inputs it uses.
- D. a firm can shut down, but it cannot exit the industry
Explanation
In the long run, no input is fixed, so the firm can adjust all factors of production and its scale of operation. Economic profits are not guaranteed, because entry and exit tend to eliminate them in competitive industries.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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