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Q: Which of the following statements is NOT true ?
  • A. In the short run, a firm cannot vary all the inputs.
  • B. A firm, in order to produce different levels of output in the long run may not vary one of the inputs.
  • C. One of the factors cannot be varied, and therefore, remain fixed in the short run.
  • D. in the long run, all factors of production can be varied.
Correct Answer: Option B - In order of producing a good or a set of goods, a firm uses different factors such as land, labour, capital etc. These inputs are counted as variable inputs and in long run all factors of production are variable. As per the Microeconomic principles, during short run a firm may vary one of its factors in order to increase production, while in the long run the firm may vary more than one factors for maximizing its production.
B. In order of producing a good or a set of goods, a firm uses different factors such as land, labour, capital etc. These inputs are counted as variable inputs and in long run all factors of production are variable. As per the Microeconomic principles, during short run a firm may vary one of its factors in order to increase production, while in the long run the firm may vary more than one factors for maximizing its production.

Explanations:

In order of producing a good or a set of goods, a firm uses different factors such as land, labour, capital etc. These inputs are counted as variable inputs and in long run all factors of production are variable. As per the Microeconomic principles, during short run a firm may vary one of its factors in order to increase production, while in the long run the firm may vary more than one factors for maximizing its production.