Question

Explain the difference between costs in the short run and long run

Explain the difference between costs in the short run and long run

Homework Answers

Answer #1

Short run is the period of time during which production can be increased only by increasing variable factors. Fixed factor like plant and machinery remains constant. The producer can control only the variable costs not the fixed cost. Accordingly, the producer must cover at least variable costs of production during the short period.

Long period is the period of time during which production can be increased by way of additional application of all the factors of production. The producer must cover all costs of production. In fact all costs are of the nature of variable costs in the long run because no factor is a fixed factor in the long run. All costs are under the control of the producer, and therefore must be covered.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Explain the difference between the “short run” and the “long run”. Be specific.
Explain the difference between the “short run” and the “long run”. Be specific.
Is the basic difference between the short run and the long run that the law of...
Is the basic difference between the short run and the long run that the law of diminishing returns applies in the long run, but not in the short run?
1.  What is the difference between the short run and the long run? Explain the        Law of...
1.  What is the difference between the short run and the long run? Explain the        Law of Diminishing Marginal returns. 2.  Discuss the difference between the market demand curve of a purely      competitive industry and the demand curve confronted by an individual      firm in pure competition. 3.  What is a monopolist, and what is required for a monopolist to earn profits      in the long run? 4.  What does the demand curve facing a monopoly look like?Why? 5.  What is the Law of Diminishing Marginal Utility...
21) The main difference between the short run and the long run is that: A) in...
21) The main difference between the short run and the long run is that: A) in the short run all inputs are fixed, while in the long run all inputs are variable. B) in the short run the firm varies all of its inputs to find the least-cost combination of inputs. C) in the short run, at least one of the firm's input levels is fixed. D) in the long run, the firm is making a constrained decision about how...
1.        Is the basic difference between the short run and the long run that the...
1.        Is the basic difference between the short run and the long run that the law of diminishing returns applies in the long run, but not in the short run? 2.        Draw a typical production function and explain its shape. Below that diagram, draw an average product schedule and marginal product schedule. Indicate the relationship between the two diagrams. ##3         Explain why the marginal product of labour initially increases as more workers are hired and then eventually...
What is the difference between short-run and long-run production time frame?
What is the difference between short-run and long-run production time frame?
25. In the economics for a company what is the difference between short run and long...
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
Explain the difference between product costs and period costs as they relate to the income statement....
Explain the difference between product costs and period costs as they relate to the income statement. Are these terms synonymous with short-run and long -run?
. The key difference between the long-run and short-run model is the assumption that prices are...
. The key difference between the long-run and short-run model is the assumption that prices are flexible. In the short-run prices are assumed to be fixed (or, at least, prices are expected not to fall). Why might prices be sticky downward?
1(a)What is the difference between the long-run and the short-run? Give specific examples from two different...
1(a)What is the difference between the long-run and the short-run? Give specific examples from two different industries. (b)How do some firms minimize long-run costs with diseconomies of scale?