The distinction between the short run and the long run is
A) strictly a calendar matter; the long run is over 10 years.
B) dependent solely on the time period necessary to vary all relevant inputs.
C) that in the short run neither input nor output can be changed.
D) that the law of diminishing marginal returns is operational in the long run but not in the short run.
E) operationally meaningless since the firm is continually planning for the future in the short run.

Question

Quizplus · Accepted Answer

The distinction between the short run and long run is based on the time period required to vary all relevant inputs. In the short run, some inputs are fixed, while in the long run, all inputs can be varied. The time period required to vary all relevant inputs can vary depending on the industry and the nature of the inputs.

The Distinction Between the Short Run and the Long Run