Question

A firm can vary

in the long run.
A. both its labor and its capital inputs
B. its sunk costs
C. its labor input but not its capital input
D. neither its labor nor its capital input
E. its capital input but not its labor input

Answer 1

In the long run, a firm can vary both its labor and its capital inputs to adapt to changing market conditions.

Step-by-step explanation:

In the long run, a firm has the flexibility to vary both its labor and its capital inputs. This means that a firm can adjust the amount of labor and capital it uses in its production process depending on its needs and market conditions. For example, if a firm is experiencing a higher demand for its products, it can hire more employees and invest in more capital equipment to increase its production capacity.

Learn more about long run variation of labor and capital inputs