Question

Explain the concepts of the short run and the long run.

Answer 1

Short-run is a period when some factors of production are fixed and some are variable. Output can be increased only by increasing the application of the variable factor. In the short run, the scale of production remains constant.
The long run is a period when all factors of production are variable. Output can be increased by increasing the application of all factors of production. In the long run, the scale of output can be changed.