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How short is the short-run production period?
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Although we often talk about the short run in economics, it is not in any way a set period of time. That is, you cannot say that the short run lasts for X number of weeks or Y number of years. It is not defined in that way. It is also not the same amount of time in every case. Instead, the short run varies. It is defined as a period of time in which the production process in question has at least one input that is fixed and at least one input that is variable. By contrast, in the long run, all inputs are variable.
Let us say that you run a delivery service. In your case, the fixed input in the short run might be the number of cars that you have to use for deliveries. This is fixed because you are not able to easily and quickly buy more cars. By contrast, your labor is variable. You can hire drivers for more hours or fewer hours. Thus, the short run is the period in which you only have X number of cars but in which you can change the number of driver-hours that you buy.
Thus, the length of the short run is defined not in days or weeks, but in terms of fixed and variable inputs.
Posted by pohnpei397 on May 21, 2013 at 1:24 PM (Answer #1)
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