Question

Select the item below that is not a characteristic of a firm with a long operating cycle:

1) High level of inventory
2) Lengthy production process
3) Frequent changes in management
4) Extensive research and development

Answer 1

Frequent changes in management is not a characteristic of a firm with a long operating cycle, which usually involves high inventory, long production processes, and significant research and development.

Step-by-step explanation:

The characteristic that is not a feature of a firm with a long operating cycle is frequent changes in management. Firms with long operating cycles typically have high levels of inventory, lengthy production processes, and extensive research and development due to the nature of their products and industries. Frequent changes in management is not inherently a characteristic of such firms, and does not specifically relate to the operating cycle length. In contrast, in the short run, firms cannot change the usage of fixed inputs, while in the long run, the firm can adjust all factors of production, including shifting towards less capital and more labor if the cost of machines increases.