Why Should Long-Run Objectives Take Precedence Over Short-Run Objectives

question 81

Multiple Choice

Why should long-run objectives take precedence over short-run objectives?

• A)The focus is placed on improving performance in the long term.
• B)Long-run objectives are necessary for achieving long-term performance and stand as a barrier to undue focus on short-term results.
• C)Long-run objectives will satisfy shareholder expectations for progress.
• D)Long-run objectives will force the company to deliver performance improvement in the current period.
• E)Long-run objectives will keep the company in line with its balanced scorecard.

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Definitions:

Short-run

A period in economics during which at least one factor of production is considered fixed and unchangeable, limiting the ability of the economy to adjust to changes in market conditions.

Output

The quantity of goods or services produced within a given timeframe by a firm, industry, or country.

Economy

The large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated.

Short-run Equilibrium

A state in which supply and demand are balanced, prices are stable, and there's no tendency for change in the short term.