The short run, as economists use the phrase, is characterized by ?
Correct answer: B. at least one fixed factor of production and firms neither leaving nor entering the industry
- A. a period where the law of diminishing returns does not hold.
- B. at least one fixed factor of production and firms neither leaving nor entering the industry
- C. all inputs being variable
- D. no variable inputs - that is all of the factors of production are fixed
Explanation
The short run is the period in which at least one factor of production remains fixed, even though other inputs can vary. Entry and exit are generally treated as long-run adjustments.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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