The short run is a period of time:
a. in which a firm uses at least one fixed input.
b. in which all inputs are variable
c. of one year.
d. of six months.
e. None of the above
The correct answer and explanation is:
The correct answer is a. in which a firm uses at least one fixed input.
Explanation:
In economics, the short run refers to a period of time in which at least one factor of production is fixed, while others may vary. A firm’s production decisions in the short run are influenced by this constraint. For example, a firm may have a fixed capital base (e.g., machines or factory space) but can adjust variable factors like labor or raw materials. In contrast, the long run is a period where all inputs can be varied, and the firm has the flexibility to adjust its capital and labor fully.
The key distinction between the short run and the long run lies in the flexibility of production. The short run is typically marked by the presence of fixed inputs. These fixed inputs cannot be changed immediately due to the time required for adjustment. For example, if a firm has a limited number of machines, it cannot instantly purchase new ones to increase production capacity.
The short run does not necessarily have a set duration like one year or six months. Instead, its length depends on the specific industry or production process in question. The defining characteristic of the short run is not a set time frame, but the mix of fixed and variable inputs.
In summary, the short run is a period in which a firm operates under constraints imposed by fixed inputs, allowing only some level of flexibility with variable inputs. This makes the answer a the most accurate in describing the short run in economic terms.