Question

25. In the economics for a company what is the difference between short run and long run

A) In the long run all factors of production can be changed, in the short run some factors of production are fixed

B) In the short run all factors of production can be changed, in the long run some factors of production are fixed

C) In the short run profits are less

D) In the long run profits are less

Answer 1

Q25) The answer is (a)

In the short run, there are both fixed factors of production as well as variable factors. For instance, factors like land, machinery etc are fixed in the short run and can not be changed. Factors like labor etc are variable in the short run and can be changed. In the long riun, all the factors become variable and thus can be changed as required.

(b) is wrong as in the short run all factors can not be changed

(c) and (d) are wrong as profits are not necessarily more or less in the short or long run.