Which of the following best applies to the distinction between the "long run" and the "short run"?
A)The short run is a period of approximately 1-6 months while the long run is any time frame which is longer.
B)In the short run,only new firms may enter,while in the long-run firms may either enter or exit the market.
C)The rationing function of price is a short-run phenomenon whereas the guiding function is a long-run phenomenon.
D)All of the above statements are correct.

Question

Quizplus · Accepted Answer

The rationing function of price is a short-run phenomenon as it involves the immediate allocation of scarce resources, whereas the guiding function of price is a long-run phenomenon as it guides producers towards the most efficient production methods in the long run. Options A and B are incorrect as they wrongly define the short run and long run. Option D is incorrect as only option C is correct.

Which of the Following Best Applies to the Distinction Between