What is the key difference between the short run and the long run in economics?

• In the short run, all inputs are variable; in the long run, at least one input is fixed.

• The short run refers to less than one year, while the long run refers to more than one year.

• In the short run, at least one input is fixed; in the long run, all inputs are variable.

• The short run focuses on production, while the long run focuses on costs.

If a firm doubles all its inputs and its output more than doubles, what is it experiencing?

• Constant returns to scale

• Decreasing returns to scale

• Increasing returns to scale

• Diminishing marginal returns

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What does the concept of economies of scale imply for a firm?

• Getting bigger is more expensive.

• Average costs increase as output increases.

• Getting bigger is cheaper.

• Total costs decrease as output increases.

What is a common reason for a firm to experience diseconomies of scale?

• Increased specialization of labor.

• Difficulty in managing and coordinating a very large operation.

• Ability to buy resources in bulk.

• Utilizing super productive machines.