Economics Short Run Vs Long Run Costs Questions
Short-run costs in economics refer to the expenses incurred by a firm in the production process that cannot be easily adjusted or changed in the short term. These costs include fixed costs, which are expenses that do not vary with the level of production, such as rent and salaries, as well as variable costs, which are expenses that change with the level of production, such as raw materials and labor. In the short run, firms are unable to alter their fixed costs, but they can adjust their variable costs to some extent.