What Are the Differences Between the Short Run, Long Run

question 145

Essay

What are the differences between the short run, long run, and very long run?

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Definitions:

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than distributed to shareholders as dividends.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until its maturity date, considering all interest payments and the repayment of principal.

Tax-Deductibility

The feature of certain expenses that can be subtracted from gross income to reduce taxable income and lower the tax bill.

Interest Expense

The cost incurred by an entity for borrowed funds; this can include payments on loans, bonds, or lines of credit.