Question

What is short run and long run and how does that relate to microeconomics?

Answer 1

In economics the short run and long run referes to the time period in the economy. In the short run at least one of the factors of prioduction is fixed and the all other factors of production are variable. If the firm want to increase the production in the short run the firm can increase or decrease the variable factors of production and the firm cannot be able to alter the fixed factors of production.

In the long run there is no distinction between fixed and the variable factors, all the factors of productions are variable. So in the long run the firm has got the flexibility. The short run and the long run is associated with the firms in the economy and these firms are studied in the micro economics. So there is a clear relation