Final answer:
The correct answer is C. The factor not relevant in the long-run is fixed costs since all costs become variable when firms can adjust all inputs. Cost curves like the long-run average cost curve reflect economies and diseconomies of scale. Both explicit and implicit costs are vital for economic profit calculations.
Step-by-step explanation:
In the long-run, all costs are variable, and firms have the flexibility to adjust all inputs. Therefore, fixed costs, which are costs that do not change regardless of the production level, become irrelevant as they can also be altered. For instance, a firm can make investments to increase or decrease their production capacity, altering what would be considered fixed costs in the short run.
Economies of scale and diseconomies of scale relate directly to the shape of the long-run average cost curves, which are typically U-shaped, reflecting periods of decreasing average costs followed by increasing average costs due to efficiencies gained and then lost as scale increases.
It is important to distinguish between explicit and implicit costs. Explicit costs are direct, out-of-pocket expenses, such as wages and rent, whereas implicit costs represent opportunity costs of resources the firm already owns, like using company-owned land for expansion without incurring additional purchase costs. Both costs are essential for calculating economic profit, which includes both explicit and implicit costs, unlike accounting profit, which only considers explicit costs.