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5 votes
True or false

"In the long run, a firm that
produces and sells computers gets to
choose how many workers to hire, the size
of its factories, and which shortrun
averagetotalcost curve to use"

1 Answer

1 vote

Final answer:

In the long run, a firm that produces computers can choose how many workers to hire, the size of its factories, and which short-run average total cost curve to use to achieve the lowest possible long-run average cost.

Therefore, the correct answer is: option 'true'.

Step-by-step explanation:

The decision-making power of a firm in the long run allows it to optimize its production and cost structure to remain competitive in the market.

In the long run, a firm that produces and sells computers has the ability to choose how many workers to hire, the size of its factories, and which short-run average total cost curve to use.

This is because in the long run, all costs become variable costs and firms have the flexibility to adjust their production technology to achieve the lowest possible long-run average cost.

For example, if a firm realizes that hiring more workers would increase its production efficiency and reduce costs, it can choose to hire more workers. Similarly, if a firm finds that a larger factory size would result in economies of scale and lower per-unit costs, it can choose to expand its factory.

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