What is the key difference between the short-run and long-run in terms of elasticity of supply?
A)Fixed productive capacity
B)Labor changes
C)No changes can be made to capital or labor
D)No difference

Question

Quizplus · Accepted Answer

The key difference between the short-run and long-run in terms of elasticity of supply is that in the short-run, the productive capacity of the firm is fixed, while in the long-run, the firm can adjust its productive capacity by changing its capital inputs. Therefore, the firm's supply is typically more elastic in the long-run than in the short-run. Option A) Fixed productive capacity is the correct answer.

What Is the Key Difference Between the Short-Run and Long-Run