📚 Learning Guide
Investment and Long-Run Supply
easy

What is the primary reason that businesses invest in long-term projects?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

To increase future benefits

B

To reduce current expenses

C

To avoid government regulations

D

To hire more employees

Understanding the Answer

Let's break down why this is correct

Answer

Businesses invest in long-term projects mainly to ensure future growth and stability. These projects, like building new factories or developing new products, often require a lot of money and time upfront but can lead to greater profits over many years. For example, if a company invests in renewable energy sources, it may spend a significant amount initially, but in the long run, it can save on energy costs and attract environmentally-conscious customers. Additionally, successful long-term projects can strengthen a company's position in the market and create jobs, which benefits the economy. Overall, the goal is to create sustainable value that will pay off well into the future.

Detailed Explanation

Businesses invest in long-term projects to gain more benefits in the future. Other options are incorrect because Some might think that investing in long-term projects helps save money now; It's a common belief that businesses invest to avoid rules from the government.

Key Concepts

future benefits
Topic

Investment and Long-Run Supply

Difficulty

easy level question

Cognitive Level

understand

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