Economics Short Run Vs Long Run Costs Questions
Total costs in the short run refer to the sum of all expenses incurred by a firm in producing a specific quantity of output within a limited time period, while at least one factor of production remains fixed. These costs include both explicit costs (such as wages, raw materials, and rent) and implicit costs (such as the opportunity cost of using the firm's own resources). In the short run, some costs, like fixed costs, remain constant regardless of the level of output, while others, like variable costs, change with the level of production.