When a factory is operating in the short run,

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BlackTom AI · Accepted Answer

In the short run, some inputs are fixed while others are variable. Fixed inputs, such as machinery, buildings, and other capital equipment, cannot be readily adjusted in the short term because changing them requires time and significant investment. Variable inputs, like labor and raw materials, can be adjusted more quickly to respond to changing production needs.

Option presented: 'a. it cannot adjust the quantity of fixed inputs.' This statement aligns with the standard economic understanding of the short run: firms cannot easily change their fixed inputs in the short run, so the quantity of fixed inputs remains constant while output can be adjusted through variable inputs.

If there were other options (which we don’t have here), typical incorrect alternatives might claim that fixed inputs can be changed in the short run, or that all inputs are variable in the short run. Such statements would be flawed because they contradict the core distinction between fixed and variable inputs in the short run framework.

In summary, the assertion that a firm cannot adjust the quantity of fixed inputs in the short run correctly describes the classical short-run production setting, where only variable inputs are readily adjustable to change output.

When a factory is operating in the short run,

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