Period of three years or longer
Period long enough to allow firms to change plant size and capacity
Period long enough to allow firm to make economic decisions
A period which affects larger than smaller firms
Answer is Right!
Answer is Wrong!
The correct answer is: B. Period long enough to allow firms to change plant size and capacity.
The long run is a period of time long enough for firms to change all of their inputs, including plant size and capacity. In the long run, all inputs are variable, and firms can choose the optimal combination of inputs to produce their output.
The other options are incorrect because:
- Option A is too specific. The long run is not necessarily a period of three years or longer. It can be any period of time long enough for firms to change all of their inputs.
- Option C is too general. The long run is not simply a period of time long enough to allow firms to make economic decisions. It is a period of time long enough for firms to change all of their inputs.
- Option D is incorrect. The long run does not necessarily affect larger firms more than smaller firms. It can affect all firms equally, depending on the specific circumstances.