Final answer:
A company hiring an entire shift of workers exemplifies a short-run adjustment, while installing new equipment indicates a long-run adjustment, as the former does not change fixed inputs and the latter involves altering the firm's overall production capacity.
Step-by-step explanation:
A company hiring an entire shift of workers is an example of a short-run adjustment, whereas installing new equipment is an example of a long-run adjustment. The distinction between short run and long run is crucial in understanding how businesses make adjustments based on their operational needs.
In the short run, firms are constrained in their ability to alter fixed inputs, such as the size of their factory or the amount of heavy machinery they possess. However, in the long run, firms can adjust all factors of production, including fixed inputs, allowing them to make more permanent changes like buying additional equipment or improving technology.
For example, in response to increased demand, a company can quickly hire additional workers, which is a short-run adjustment as it does not immediately alter the company’s capital assets.
On the other hand, investing in new machinery to increase production capacity or to replace an entire production process represents a long-run adjustment, as it involves changes to the firm’s capital structure and often requires significant time and financial investment.