Answer to Question #231744 in Economics of Enterprise for MDM

Question

Ben makes ice, which he sells to restaurants and at petrol stations. He has one freezer, which is all the capital he owns, and he has one person working for him. When an extreme heatwave hits, the demand for ice increases substantially and Ben has to supply more ice. Initially, Ben does not have the means to buy another freezer and rather employs two more people. What will be considered the "long run" for Ben in his ice-making business?

A. when he starts making a profit

B. when he can buy another freezer

C. when the heatwave is over

D. when he has employed the two extra people

Answer 1

When he starts making profits.

Profits tends to be the reason behind the stability and long terms operations of a business.