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JAMB Economics 2001 Question 19

Question 19

Theory of Production

The long run is a period during which a firm

  1. A.sells inputs to purchase fixed assets
  2. B.varies all its inputs
  3. C.sources all its inputs from within
  4. D.replaces all its inputs
Show the answer and explanation

Answer: B (varies all its inputs)

Explanation

In the long run there are no fixed factors: the firm can change the quantity of all its inputs.