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Distinguish between short run and long run. |
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Answer» Short run is a time period when some factors are fixed and some variable. Adjustment to demand can only be done by changing the variable factors such as raw materials, labour, power etc. A firm cannot change the amount of factors such as land, machinery, factory building etc. Long run is a time period when all factors are variable. A producer has enough time to expand his business by changing plants and equipments etc. |
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