Question

In​ economics, the short run is the time frame in which​ ______ and the long run is the period of time in which​ ______. A. the quantities of all factors of production are variable but technology is​ fixed; sunk costs are variable B. the quantities of some factors of production are​ variable; the quantities of all factors of production are fixed C. the quantities of all factors of production are​ fixed; the quantities of all factors of production can be varied D. the quantities of some factors of production are​ fixed; the quantities of all factors of production can be varied

Answer 1

Answer:the quantities of some factors of production are​ fixed; the quantities of all factors of production can be varied - D

Explanation:

In the short run, some factors of production are fixed, which is usually the capital. Therefore for a company to increase output, it would need employ more workers, but would not increase capital.

Therefore in the short run, we can get diminishing marginal returns, which may cause marginal costs to start increasing quickly.

Also, in the short run, prices and wages fall out of equilibrium because a sudden rise in demand may lead to higher prices, and companies may not have the the capacity to respond and increase supply.

Long run

In the long run, usually greater than 6 months, all main factors of production are variable. The company has time to build a bigger one making it respond to changes in demand which means that a sudden rise in demand, would have a complimentary increase in supply to meet the demands and prices can be adjusted.

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Answer 2

Answer:

The quantities of some factors of production are fixed; the quantities of all factors of production can be varied.

Explanation:

Short run can be described as a time frame in which one of the factors of production such as capital is fixed.

Short run states that at a particular time in the future, one or more factors of production will be fixed, while the others are inconsistent.

In short run, the amount of prices and wages are not balanced. Take for example a rise in demand could result to a drastic increase in price of the product.

Long run can be defined as a period of time where all the factors of production are variable. The long run period may be between 6months to 1 year.

During the long run period organisations are able to modify all manner of costs.