Which of the following would be classified as a short-run decision?
A) A firm's decision to decrease in the amount of electricity used in day -to-day operations by encouraging employees to adopt conservation strategies, e.g., shut off lights when leaving a room.
B) A restaurant's decision to increase the number of patrons it can accommodate by adding on a new dining room.
C) A trucking firm's decision to move to a smaller facility.
D) A university's decision to add a new residence hall.

Question

Quizplus · Accepted Answer

In the short run, firms can adjust some inputs but not all. Option A involves a change in operational behavior without altering fixed assets, making it a short-run decision. The other options involve changes to fixed assets, which are typically long-run decisions.

Which of the Following Would Be Classified as a Short-Run