For this discussion forum let\'s discuss the difference between long-run and sho

Question

For this discussion forum let's discuss the difference between long-run and short-run. If you were a business owner, how would you apply the principles in this chapter and the previous chapter to make decisions about your business? You will need to define short-run and long-run from your own knowledge, explain the difference, and then determine what decisions you would have to make in time frames. You may use your Fortune 500 company if you like. Be specific in the decisions that you might have to make short-run and long-run (include at least three of each).

Explanation / Answer

Short Run:

This is period in which one factor of production if fixed. firm can increase its output by increasing quantity of variable factor. Firm has to making following decisions in short run:

Long Run:

In long run, all factors of production are variable. firm can change its plant according to its requirement. Following decisions are taken:

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