Question

12. The economists, the main difference between the short run and the long run is that
(a) in the short run all inputs are fixed, while in the long run all inputs are variable.
(b) in the short run the firm varies all of its inputs to find the least-cost combination of inputs.
(c) in the short run, at least one of the firm’s input levels is fixed.
(d) in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.

Answer 1

Answer:

The short run, as economists use the phrase, is characterized by at least one fixed factor of production so the proportion of inputs can be changed, the law of variable proportion will only operate in the short run. In the long run all factors are variable as producers have enough time to organize all factor inputs in the appropriate proportions to achieve the minimum efficient scale.