The short run is not the same length of time for all firms and industries because:
A) entrepreneurs have different tastes and preferences.
B) the average product of labor varies across industries.
C) the life span of capital and the extent of capital specialization will vary across firms and industries.
D) The marginal product of capital begins to diminish at different levels of capital utilization across firms.

Question

Quizplus · Accepted Answer

The short run is defined as the period of time in which at least one factor of production (usually capital) is fixed, while others (usually labor) are variable. Therefore, the length of the short run will depend on the nature and extent of capital specialization and the life span of capital. Different firms and industries may have different levels of capital specialization and different types of capital equipment with varying lifespans, making the short run different across them. Choices A, B, and D are not relevant to determining the length of the short run.

The Short Run Is Not the Same Length of Time