The difference between the short run and the long run
The short run is the period when a firm cannot change at least one input, such as its factory size. The long run is when a firm can change every input it uses.
Real World
During the 2021 shipping container shortage, Maersk could hire extra dock workers quickly (short run) but could not commission new container ships fast enough — new vessels take 2–3 years to build, illustrating a fixed capital constraint in the short run.
Exam Focus
Never define the short/long run using a specific time period like 'under one year' — always define by whether at least one factor of production is fixed.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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