Choose an incorrect statement regarding firm's operation in a short-run. A. produces a single output B. uses fixed inputs C. relationship between inputs and output cannot be changes D. all units of given input are identical
Question
Choose an incorrect statement regarding firm's operation in a short-run. A. produces a single output B. uses fixed inputs C. relationship between inputs and output cannot be changes D. all units of given input are identical
Solution
To determine the incorrect statement regarding a firm's operation in the short-run, let's analyze each option step by step:
A. Produces a single output:
- In the short-run, a firm typically focuses on producing a single type of output. This statement is generally correct.
B. Uses fixed inputs:
- In the short-run, some inputs are fixed, meaning their quantity cannot be changed. This statement is correct.
C. Relationship between inputs and output cannot be changed:
- This statement is incorrect. In the short-run, while some inputs are fixed, the firm can still change the variable inputs to alter the level of output. Therefore, the relationship between inputs and output can indeed be changed by adjusting the variable inputs.
D. All units of given input are identical:
- This statement is generally correct, as it assumes that each unit of a given input is homogeneous.
Therefore, the incorrect statement is: C. Relationship between inputs and output cannot be changed.
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