The deciding factor that determines whether a firm is operating in the short run versus the long run is whether the

Question

Quizplus · Accepted Answer

The distinction between the short run and the long run in economics is based on the flexibility of factors of production. In the short run, at least one factor of production (often capital, such as plant size) is fixed, while in the long run, all factors of production, including plant size, can be varied. This makes choice C the correct answer, as it directly addresses the ability to change all factors, including plant size, which defines the transition from short run to long run operations.

The Deciding Factor That Determines Whether a Firm Is Operating