Short run vs Long Run



Short Run

  • short run is that period of time in which a producer can not increase the supply of all factors.
  • In short run atleast one factor is fixed.
  • A Producer has certain commitments in the short run.

Long Run

  • In the long run, the firm can change everything, all the factors of production are variable
  • No costs are fixed, All costs become variable
  • Producer can make major decisions; Investments can be made in the long run.
  • In long run , a firm can Chooses technology, can make certain investments.
  • can Make long term contractual commitments.

Time Frame of short and Long run
  • There is no specific length to the long or short run.
  • It depends on industry to industry.
  • Example - for a steel plant, 1 year is short run. But for a small industry, it is a long run.
  • Once the firm makes its long run decisions, then it chooses Long and Short Run according to the time.

1 comment:

  1. Baccarat - The World's Hottest Baccarat! - Wales
    Baccarat is the biggest name in the world and it's the only casino game where you have to pick one 메리트카지노 of the 바카라 사이트 best numbers หารายได้เสริม on any given hand. The game is

    ReplyDelete