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Author Question: In economics, what is the difference between the short run and the long run? What will be an ... (Read 32 times)

mckennatimberlake

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on: Jun 29, 2018
In economics, what is the difference between the short run and the long run?
 
  What will be an ideal response?

Question 2

There are many cattle ranchers in the world, and there are also many McDonald's restaurants in the world. Why, then, does a McDonald's restaurant face a downward-sloping demand curve while a cattle rancher faces a horizontal demand curve?
 
  What will be an ideal response?
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sarahccccc

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Reply #1 on: Jun 29, 2018
Answer to Question 1

In economics, the short run refers to the period of time during which at least one of a firm's inputs is fixed. The long run refers to the period of time in which a firm can vary all its inputs, adopt new technology, and increase or decrease the size of its physical plant.

Answer to Question 2

All cattle ranchers are selling identical goods, but fast food restaurants do not sell identical goods. If a cattle rancher raises his price above the market price, he will lose all of his buyers. A McDonald's restaurant can raise its price without losing all of its buyers because it is selling a product that is not identical to the products sold by other restaurants.


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