Question

Distinguish between the short run and the long run. In the short​ run, ______. In the long​ run, ______.

A. a​ firm's plant is​ fixed; a firm can change its plant
B. the quantity of only one factor of production is​ fixed; the quantities of all factors of production can be varied
C. all factors of production are variable except​ technology; the quantities of all factors of production can be varied
D. all costs are sunk​ costs; the quantity of only one factor of production is fixed

Answer 1

In the short run, fixed factors of production limit a firm's ability to adjust to market conditions, while in the long run, all factors of production can be altered allowing for complete adaptability.

Step-by-step explanation:

To distinguish between the short run and the long run in the context of business and economics:

• In the short run, a firm's plant and some factors of production are fixed, meaning that they cannot change the usage of these fixed inputs. For example, they may be working with a certain capacity of machinery or buildings that they cannot alter immediately.
• In the long run, the firm can adjust all factors of production, which includes changing the plant size, technology, or other capital resources. This provides the firm with the flexibility to scale up or down according to market demands and long-term strategic plans.

The correct answer to the question is therefore option A: 'In the short​ run, a​ firm's plant is​ fixed; in the long​ run, a firm can change its plant.'

Answer 2

B. the quantity of only one factor of production is​ fixed; the quantities of all factors of production can be varied

Step-by-step explanation:

• As in the short run a firm can have a conceptual fixed time, while the other factors are variable in amount as the foxed costs have no impacts on the short run but may tend to have an impact on the form longer run that could potentially increase the output that could be increased by increasing the number of variable costs.

• Thus, in short, the form is in a monopolistically competitive market hence the quantity of at least one input is fixed.