The basic difference between the short run and the long run is that
A)all costs are fixed in the short run, but all costs are variable in the long run.
B)the law of diminishing returns applies in the long run but not in the short run.
C)at least one resource is fixed in the short run, while all resources are variable in the long run.
D)economies of scale may be present in the short run but not in the long run.

Question

Quizplus · Accepted Answer

In economic theory, the short run is defined by the presence of at least one fixed input or resource, meaning that not all costs can be adjusted. In contrast, the long run is characterized by the ability to adjust all inputs and resources, making all costs variable. This distinction is crucial for understanding how firms can adapt to changes in demand or technology over different time horizons.

The Basic Difference Between the Short Run and the Long