Which of the Following Represents the Key Difference Between the Short

question 65

Multiple Choice

Which of the following represents the key difference between the short run and the long run?

• A) In the long run, the firm makes commitments to a certain type of production technology which are represented as fixed costs in the long run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the short run.
• B) In the short run, the firm makes commitments to a certain type of production technology, which are represented as fixed costs in the short run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the long run.
• C) The short run refers to less than two years and the long run is over two years.
• D) In the short run, all costs are fixed but in the long run, capital costs are variable.

---

Definitions:

Notice

In legal terms, notice refers to the formal communication of information or a fact to an individual or entity, ensuring they are aware of certain conditions or changes.

Perfect Tender Rule

A principle in commercial law that allows buyers to reject goods if they do not meet all contract specifications, regardless of how minor the defect may be.

Material Breach

A substantial breach of a significant term or terms of a contract that excuses the nonbreaching party from further performance under the contract and gives the nonbreaching party the right to recover damages.

Substantial Performance

A legal concept in contract law where a party has performed enough of their contractual obligation to warrant payment, albeit with minor deviations from the terms.