Which of the following represents the key difference between the short run and the long run? O The short run refers to less than two years and the long run in over two years. None of the above are correct. O In the short run, the firm makes commitments to a certain type of production technology, which are represented as fixed costs in the short run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the long run. In the long run, the firm makes commitments to a certain type of production technology which are represented as fixed costs in the long run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the short run.
Which of the following represents the key difference between the short run and the long run? O The short run refers to less than two years and the long run in over two years. None of the above are correct. O In the short run, the firm makes commitments to a certain type of production technology, which are represented as fixed costs in the short run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the long run. In the long run, the firm makes commitments to a certain type of production technology which are represented as fixed costs in the long run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the short run.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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Transcribed Image Text:Which of the following represents the key difference between the short run and the long run?
The short run refers to less than two years and the long run in over two years.
None of the above are correct.
O In the short run, the firm makes commitments to a certain type of production technology, which are
represented as fixed costs in the short run. For example, they have signed a lease on a particular production
facility. These fixed costs do not exist in the long run.
In the long run, the firm makes commitments to a certain type of production technology which are
represented as fixed costs in the long run. For example, they have signed a lease on a particular production
facility. These fixed costs do not exist in the short run.
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