The Distinction Between the Short Run and the Long Run

question 24

Multiple Choice

The distinction between the short run and the long run is

• A) strictly a calendar matter; the long run is over 10 years.
• B) dependent solely on the time period necessary to vary all relevant inputs.
• C) that in the short run neither input nor output can be changed.
• D) that the law of diminishing marginal returns is operational in the long run but not in the short run.
• E) operationally meaningless since the firm is continually planning for the future in the short run.

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Definitions:

Chain of Command

The hierarchy within an organization that establishes the authority and responsibility relationships among employees.

Fastest Growth

The highest rate of expansion in size, production, or market share experienced by an entity over a specific period.

Corporate Joint Ventures

A strategic alliance between two or more businesses that agree to share resources, risks, and rewards to pursue common objectives.

Mergers and Acquisitions

The process of combining two or more companies into one or purchasing one by another to enhance strength and efficiency.