In the long run, which statement is true about costs?

• A. All costs are fixed.
• B. Some costs are fixed.
• C. All costs are variable.
• D. Costs are always unpredictable.

Answer: (C)

In the long run, every input can be changed, so there are no fixed inputs. When no input is fixed, all costs vary with the level of output. As you scale production, you adjust capital, labor, and other resources, so total cost changes accordingly.

This differs from the short run, where some inputs are fixed (like a current factory or lease), creating fixed costs that don’t change with output. Saying all costs are fixed would imply no change with production, which isn’t true in the long run. And costs aren’t inherently unpredictable—their levels can be anticipated from prices and technology, even though they do depend on how much you produce.