Final answer:
The long run is a period over which a firm can adjust all inputs as they are considered variable. It is not defined by a specified duration but rather on the specifics of the firm, such as the length of fixed commitments like leases. The correct option is 1.
Step-by-step explanation:
The term long run is a concept in economics that refers to a period during which all costs are variable, and a firm can adjust all factors of production, such as building new factories, purchasing new machinery, or closing existing facilities. It's a planning period over which a firm can consider all inputs as variable.
The length of the long run is not fixed; it depends on the specifics of the firm and its commitments, such as leases on factories. For example, if a one-year lease is in place, any period beyond that year would be considered the long run for that firm, as all costs beyond that point can be considered variable.
Therefore, the correct answer to the student's question is: The long run is a planning period over which a firm can consider all inputs as variable.
It is crucial to recognize that there is no universally agreed upon specific duration for a long run, such as 6 months, 5 years, or any other fixed period, as it varies according to the specific business situation.