The difference between long run and short run equilibrium is that:
A)in the long run new firms can enter the industry.
B)the short run is less than a year.
C)in the short run new firms can enter the industry.
D)the long run refers to the next generation.

Question

Quizplus · Accepted Answer

In the long run, new firms can enter the industry and existing firms can adjust their production capacity, while in the short run, entry and exit are limited or impossible, and firms may not have enough time to adjust their production capacity. Therefore, the difference between long run and short run equilibrium is that entry and exit are possible in the long run but limited or impossible in the short run. B, C, and D are incorrect because the length of time is not the defining factor, and the long run does not refer to a specific time period.

The Difference Between Long Run and Short Run Equilibrium Is