The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5

-According to economic theory, the difference between the long run and the short run is:
A)about two months.
B)about two years.
C)not relevant for executive decision makers.
D)strictly theoretical so that in practice there is no difference between them.
E)the ability for a firm to vary all resources.

Question

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5
 
-According to economic theory, the difference between the long run and the short run is:
A)about two months. 
B)about two years. 
C)not relevant for executive decision makers. 
D)strictly theoretical so that in practice there is no difference between them. 
E)the ability for a firm to vary all resources.

Quizplus · Accepted Answer

The main difference between the short run and the long run is that in the short run, at least one input is fixed, while in the long run, all inputs can be varied. The ability for a firm to vary all resources is therefore the defining characteristic of the long run. Choices A, B, C, and D are incorrect as they do not accurately describe the difference between the short run and the long run.

The Table Given Below Shows the Average Total Cost of Production