The fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.

Question

Quizplus · Accepted Answer

In the short run, the presence of fixed inputs means that firms face certain costs regardless of their level of production, leading to the shape of the average total cost curve being U-shaped. In the long run, all inputs are variable, allowing firms to adjust all factors of production to find the most cost-efficient level of operation, which affects the shape and position of the long-run average cost curve.

The Fact That Many Inputs Are Fixed in the Short