What's true about both the short-run and long-run in terms of production and cost analysis?

Question

Quizplus · Accepted Answer

All of the statements A, B, C, and D are true for both short-run and long-run analysis. In the short-run, at least one input is fixed, while in the long run, all inputs are variable. The law of diminishing returns applies to the short-run as it is based on the assumption that at least one factor is fixed. The time horizon is what determines whether an input is fixed or not, and it varies between short-run and long-run analysis. Therefore, option E is the correct choice as it encompasses all the correct statements.

What's True About Both the Short-Run and Long-Run in Terms