Question

The short run is a time period such that a. the existing firms in the market do not have sufficient time to change the amounts of any of the inputs that they employ. b. the existing firms in the market do not have sufficient time to either increase or decrease their current rate of output. c. new firms may build plants and enter the industry. d. the existing firms in the market do not have sufficient time to increase the size of their existing plant or build a new factory.

Answer 1

Answer: Option B

Step-by-step explanation:

Short run in economics is a near future where the existing firms do not have enough time to change their output numbers. One input is fixed input while others are variable inputs. To maintain the rate of profits in the short run the lease, rent, and other fixed costs are the limitations as they cannot be modified in short notice.

Short run equilibrium price will be lower than the long run equilibrium price. In the short run equilibrium reaches a new point as the freedom of the resources are restricted.