In the Short Run, as Compared to the Long Run

question 20

Short Answer

In the short run, as compared to the long run, both the price elasticity of demand and the price elasticity of supply tend to be more

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Definitions:

Average Operating Assets

The average value of those assets used for the normal operation of a company over a specific period, often used in return on investment calculations.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross income.

Residual Income

The income that remains after subtracting all required costs of capital from operating income.

Average Operating Assets

The average value of the assets used in the normal operation of a business to generate revenue, calculated typically over a fiscal year.