What is the difference between the short run and the long run?
What will be an ideal response?
The short run is a time period so short that the firm cannot change the quantity of at least one factor of production, say plant size for a manufacturer or land for a farmer. The only way to increase output, therefore, is by combining more units of the variable factors of production with the fixed factor of production. The long run is a time period sufficiently long that a firm can change the quantity of all factors of production. In the long run, nothing is fixed so output can be produced with whatever combination of factors of production the firm chooses.
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The market for lawn services is perfectly competitive. Larry's Lawn Service cannot increase its total revenue by raising its price because ________
A) Larry's supply of lawn services is perfectly inelastic B) the demand for Larry's services is perfectly inelastic C) Larry's supply of lawn services is inelastic D) the demand for Larry's services is perfectly elastic
Economists refer to expenditures on training, education, and skill development designed to increase the productivity of an individual as: a. overhead expenditures
b. investments in human capital. c. marginal revenue product. d. investments in social capital.
The marginal cost of labor is not
a. change in TLC/change in L b. equal to the marginal revenue product of labor when the employer completes the hiring process c. the change in total labor cost that results from employing an additional worker d. equal to the wage rate in a perfectly competitive market that is in equilibrium e. the marginal contribution of an additional worker to firm's revenues
Exhibit 2-3 Production possibilities curve data A B C D E Capital goods 0 1 2 3 4 Consumer goods20 18 14 8 0 According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:
A. is possible but would be inefficient. B. may be a result of unemployment. C. may be a result of unused natural resources. D. is not feasible with current resources and technology.