Question

The difference between the short-run and the long-run is _____.

a. three months, or one business quarter.
b. the time it takes for firms to change all inputs in the production process.
c. the time it takes for firms to change only their variable inputs.
d. More information is required to answer this question.

Answer 1

Answer: the time it takes for firms to change all production inputs.(B)

Step-by-step explanation:

In macroeconomics, the short run is defined as the time horizon when the wages and prices of other inputs to production are inflexible, while the long run is the period of time when input prices have time to adjust.

In the long-run, all factors of production and costs are variable such that firms are able to adjust every costs, whereas, in the short run, the firms only influence prices through the adjustments made to production levels.