One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximising firm is that, in the short run:
A)output is not variable
B)the size of the factory is fixed
C)the number of workers used to produce the firm's product is fixed
D)there are no fixed costs

Question

Quizplus · Accepted Answer

In the short run, certain factors of production are fixed, and the size of the factory (or any capital input) is a common example of a fixed input. This means that in the short run, a firm cannot adjust the size of its physical plant or factory in response to market conditions, whereas in the long run, all inputs, including the size of the factory, can be varied.

One Assumption That Distinguishes Short-Run Cost Analysis from Long-Run Cost