21. Which of the following is true regarding the short-run and long-run producti

Question

21.

Which of the following is true regarding the short-run and long-run production of a firm?

A. A firm can experience diminishing marginal returns to labor in the long-run

B. A firm has only fixed costs in the short-run

C. A firm's total product will decrease in the long-run

D. A firm has only variable costs in the long-run

22.

If a firm's marginal product of labor is increasing, it must be true that:

A. The firm's marginal cost is increasing

B. The firm's marginal cost is decreasing

C. The firm's marginal cost is equal to its marginal product of labor

D. None of the above

A. A firm can experience diminishing marginal returns to labor in the long-run

B. A firm has only fixed costs in the short-run

C. A firm's total product will decrease in the long-run

D. A firm has only variable costs in the long-run

22.

If a firm's marginal product of labor is increasing, it must be true that:

A. The firm's marginal cost is increasing

B. The firm's marginal cost is decreasing

C. The firm's marginal cost is equal to its marginal product of labor

D. None of the above

Explanation / Answer

21. A. A firm can experience diminishing marginal returns to labor in the long-run

22. B. The firm's marginal cost is decreasing

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