Answer to Question #109361 in Microeconomics for Zara

Question

What is the difference between the short run and the long run?

Answer 1

The short run is the period of time when costs of the firm can be divided into the fixed (cost of capital) and variable ones (usually cost of labor) . The long run in microeconomics is the period of time when all the inputs of production become variable (the firm can change the volume of capital too)