CFA Practice Question

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CFA Practice Question

In the short run, the number of production facilities is ______ and the amount of labor is ______.

A. fixed; variable
B. fixed; fixed
C. variable; variable
Correct Answer: A

Because it typically takes longer to build a facility than to change the number of hours of labor hired, in the short run, labor is a variable input and the production facility is a fixed input.

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