The key difference between supply in the short run and supply in the long run is that we assume that:

Question

Quizplus · Accepted Answer

In the short run, firms may face barriers to entry or exit, such as sunk costs or limited access to resources, which restrict their ability to adjust their supply quickly. However, in the long run, firms have more flexibility to enter or exit the market, which can affect the overall supply. Therefore, option A is the correct choice as it correctly describes the key difference between short-run and long-run supply.

The Key Difference Between Supply in the Short Run and Supply