Short Run Vs Long Run
Short run refers to a period of time in which supply of certain inputs i.e., plant, building and machinery etc. is fixed or inelastic. The Short Run is a period so brief that the amount of at least one input is fixed.
Therefore, production of a commodity can be increased by increasing use of only variable inputs like labour and raw materials.
Very short run- all factors of production are inelastic in supply.
Long run refers to a time period in which the supply of all the inputs is elastic or variable. The Long Run is distinguished from the short run by being a period of time long enough for all inputs, or factors of production, to be variable as far as an individual firm is concerned.
Very long run refers to a time period in which the technology of production is also subject to change. Thus the production function changes.
Short run and long run are economists jargon. They do not refer to any specific time period. The length of time necessary for all inputs to be variable may differ according to the nature of the industry and the structure of a firm.
While for some firms short run may be 3-5 years eg shipping, aircrafts, construction etc. but for others it can be few days, weeks and months.
Powered By 360Presence
Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off