Explain the concepts of the short-run and the long run.
Explain the concepts of the short-run and the long run.
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Short-run: Short-run refers to a period in which output can be changed by changing only variable factors. Fixed inputs like plant, machinery, building etc. cannot be changed.
Long-run: Long-run refers to a period in which output can be changed by changing all factors of production. A firm can change its production techniques, purchasing new machinery etc.
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