A Difference Between the Short Run and the Long Run

question 24

Multiple Choice

A difference between the short run and the long run is that a firm in the short run:

• A)faces an unconstrained cost minimization problem, whereas the firm is constrained in the long run.
• B)faces a constrained cost minimization problem, whereas the firm is unconstrained in the long run.
• C)faces a constrained cost minimization problem in both the short run and the long run.
• D)faces an unconstrained cost minimization problem in both the short run and the long run.

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Definitions:

Long-Term Assets

Assets expected to provide economic benefits for more than one year, such as buildings, equipment, and vehicles.