The short run in this microeconomic context is a planning period over which the managers of...

The short run in this microeconomic context is a planning period over which the managers of a firm must consider one or more of their factors of production as fixed in quantity. The long run is a theoretical concept in which all markets are in equilibrium, and all prices and quantities have fully adjusted and are in equilibrium. The long run contrasts with the short run, in which there are some constraints and markets are not fully in equilibrium.

What are the key difference between short run costs and long run costs?

How are long run costs used in the firm’s output decisions?

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