The main difference between the short run and the long run is that:
A)in the short run all inputs are fixed, while in the long run all inputs are variable.
B)in the short run the firm varies all of its inputs to find the least-cost combination of inputs.
C)in the short run, at least one of the firm's input levels is fixed.
D)in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.

Question

Quizplus · Accepted Answer

In the short run, at least one of the firm's input levels (usually capital) is fixed, while in the long run all inputs can be varied. Therefore, option C is the correct answer. Option A is incorrect because in the short run, some inputs can be varied while others are fixed. Option B is incorrect because the firm may not be able to vary all of its inputs in the short run. Option D is incorrect because in the long run, the firm can make unconstrained decisions about plant and equipment.

The Main Difference Between the Short Run and the Long