Final answer:
The long run in microeconomics is also known as the variable-plant period, a time when all costs are variable and firms can adjust all production factors, unlike the short run where some costs are fixed.
Step-by-step explanation:
In microeconomics, the long run is a period of time when all costs are variable, and there are no fixed inputs. In this context, a variable-plant period is another name for the long run because firms have the flexibility to adjust all factors of production, including plant size and capital inputs. This period contrasts with the short run, where at least some factors remain fixed, such as a pizza restaurant operating within the constraints of its existing lease. So, the correct answer to the student's question is 'a. Variable-plant period.'
Long Run vs. Short Run
In the short run, businesses are limited by fixed resources (K), like leases on their current facilities. However, in the long run, they have the freedom to make alterations to these fixed resources, potentially changing locations or resizing their production capacity. For instance, once a factory lease expires, if it's been longer than the lease term, the firm would be in the long run and could thus choose to move, expand, or downsize.