Asked by Jessie Schneider on Apr 24, 2024
Verified
To economists, the main difference between the short run and the long run is that
A) the law of diminishing returns applies in the long run, but not in the short run.
B) in the long run all resources are variable, while in the short run at least one resource is fixed.
C) fixed costs are more important to decision making in the long run than they are in the short run.
D) in the short run all resources are fixed, while in the long run all resources are variable.
Short Run
in economics, refers to a period during which at least one input, such as plant size, is fixed and cannot be changed.
Long Run
A period of time in economics where all factors of production and costs are variable, allowing for complete adjustment to changes in market conditions.
Fixed Resource
An asset or input whose quantity cannot be altered in the short run for the production of goods and services.
- Recognize the determinants that impact an organization's operational choices in the short and long run.
- Understand the distinctions between the short-term and long-term perspectives in economics and their importance for strategic business planning.
Verified Answer
YJ
Yilia Jiang6 days ago
Final Answer :
B
Explanation :
In the long run, all resources and inputs can be varied by firms, allowing for adjustments in production capacity and operations. In contrast, the short run is characterized by at least one fixed input, such as capital, which cannot be easily adjusted. This distinction is crucial for understanding how firms respond to changes in the market and make decisions about production and investment.
Learning Objectives
- Recognize the determinants that impact an organization's operational choices in the short and long run.
- Understand the distinctions between the short-term and long-term perspectives in economics and their importance for strategic business planning.