A sandwich shop has six months left on its lease to its storefront and equipment and currently employs three workers who work on an on-call basis,with no contract.Ingredients are bought daily.How long is the long run for the sandwich shop?

Question

Quizplus · Accepted Answer

In the short run, the sandwich shop is constrained by its current lease and the number of workers it currently employs. However, in six months when the lease expires, the shop will have the option to move to a new location, expand or downsize their operation, and adjust the number of employees as needed. Therefore, the long run for the sandwich shop begins after the lease expires and all inputs become variable. Option A is incorrect because the long run is not necessarily a year; it depends on the specific constraints and flexibility of the business. Option B is incorrect because there is a clear difference between the short and long run in this case. Option D is incorrect because option C is true.

A Sandwich Shop Has Six Months Left on Its Lease