Short-run
Definition
The short-run refers to a period of time in which at least one input is fixed, meaning it cannot be changed. This can range from a few months to a year.
Analogy
Imagine you are planning a party and have already booked the venue. In the short-run, the venue is fixed and cannot be changed, so you need to work with what you have and make adjustments accordingly.
Related terms
Long-run: Refers to a period of time in which all inputs can be varied or adjusted. It allows for more flexibility in decision-making.
Variable inputs: Inputs that can be adjusted or changed in the short-run. Examples include labor and raw materials.
Total costs: The sum of fixed costs and variable costs incurred by a firm in producing goods or services.
"Short-run" appears in:
Subjects (1)
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.