Practice question · Put in order
Order from shortest run to longest run.
- Long run: all inputs variable
- Very long run: technology changes
- Short run: labour variable, capital fixed
- Very short run: all inputs fixed, only price adjusts
Hints
- Order by how many inputs can be varied.
- In the shortest horizon nothing can change at all.
Show the answer
- Very short run: all inputs fixed, only price adjusts
- Short run: labour variable, capital fixed
- Long run: all inputs variable
- Very long run: technology changes
Why
Time horizon determines which inputs can adjust, from momentary (none) to secular (everything including technology).
Practise Production and Costs
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