What distinguishes the short run from the long run? A) In the short run, all inp

Question

What distinguishes the short run from the long run?

A) In the short run, all inputs are variable, and in the long run, all inputs are variable. B) In the short run, some inputs are fixed, and in the long run, some inputs are fixed. C) In the short run, some inputs are fixed, while in the long run, all inputs are variable. D) In the short run, all inputs are variable, while in the long run, some inputs are fixed. What distinguishes the short run from the long run?

A) In the short run, all inputs are variable, and in the long run, all inputs are variable. B) In the short run, some inputs are fixed, and in the long run, some inputs are fixed. C) In the short run, some inputs are fixed, while in the long run, all inputs are variable. D) In the short run, all inputs are variable, while in the long run, some inputs are fixed.

Explanation / Answer

Short run and long run are two different concepts and both have different meaning for different industries. For example, short run for street hawker may be few days while for big steel industry it may be years or more.

In short run, some inputs are fixed while some inputs are variable. Producer can increase the output only through the variable inputs. If there is sudden surge in the demand, producer can meet this demand only through the variable inputs only

On other hand, in long run all inputs variable, it means there is no fixed inputs in the long run. Hence firms can increase the output by using all variable inputs. Firm adjust according to demand and supply conditions prevailing in the market.

Hence, Correct answer (C)

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