Give the meaning of the concepts of short run and long run.

1.	Give the meaning of the concepts of short run and long run.
Answer» The concepts of short-run and long run are defined aa a period simply by looking at whether all the inputs can be varied or not. It is not advisable to define short run and long run in terms of days, months or years. In the short run, at least one of the factor – labour or capital cannot be varied and therefore, remains fixed. In order to vary the output level, the firm can vary only the other factor. The factor that remains fixed is called the fixed factor and the other factor which the firm can vary is called the variable factor. In the long run, all factors of production can be varied. A firm in order to produce different levels of output, in the long run, may vary both the inputs simultaneously. So, in the long run there is no fixed factor.

Answer»

The concepts of short-run and long run are defined aa a period simply by looking at whether all the inputs can be varied or not. It is not advisable to define short run and long run in terms of days, months or years.

In the short run, at least one of the factor – labour or capital cannot be varied and therefore, remains fixed. In order to vary the output level, the firm can vary only the other factor. The factor that remains fixed is called the fixed factor and the other factor which the firm can vary is called the variable factor.

In the long run, all factors of production can be varied. A firm in order to produce different levels of output, in the long run, may vary both the inputs simultaneously. So, in the long run there is no fixed factor.

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