Which of the following distinguishes the short run from the long run in pure competition?
A)Firms can enter and exit the market in the long run but not in the short run.
B)Firms attempt to maximize profits in the long run but not in the short run.
C)Firms use the MR = MC rule to maximize profits in the short run but not in the long run.
D)The quantity of labor hired can vary in the long run but not in the short run.

Question

Quizplus · Accepted Answer

In the context of pure competition, the key difference between the short run and the long run is the ability of firms to enter or exit the market. In the short run, firms cannot easily enter or exit due to various barriers (e.g., contracts, regulations), whereas in the long run, these barriers are less restrictive, allowing for adjustments in the number of firms in the industry.

Which of the Following Distinguishes the Short Run from the Long