Question 5
Which of the following is least likely to be a firm’s decision in the long run?
O A) Jane is trying to decide whether to open a second franchise of her business.
O B) Aaron hires two additional workers to help cover the holiday rush at his shop.
O C) Mike lists his delivery truck for sale in hope of raising money to buy a new one.
O D) Ellen applies for a loan to finance an expansion of her plumbing business.

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UpStudy AI · Accepted Answer

1. In the long run, a firm can adjust all its inputs, including capital, labor, and technology. Decisions involving long-term investments, such as expanding the business or acquiring new equipment, are considered long-run decisions.

2. Option A involves deciding whether to open a second franchise, which is a long-term strategic decision.

3. Option C involves selling a delivery truck, potentially to facilitate the purchase of a new one. This concerns changes in capital structure, which is a long-run decision.

4. Option D involves applying for a loan to finance an expansion of a business. This is also a long-run decision because it affects the firm's long-term capacity and operations.

5. Option B describes hiring two additional workers for a holiday rush. This is a short-run decision since it only involves adjusting the variable input of labor temporarily, without altering fixed inputs such as capital or technology.

6. Therefore, the option that is least likely to be a firm's decision in the long run is:

$$ B) $$ Aaron hires two additional workers to help cover the holiday rush at his shop.
Option B is least likely to be a firm's long-run decision.

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