Short-run
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In economics, the concept of the short-run refers to the decision-making time frame of a firm in which at least one factor of production is fixed. Costs which are fixed in the short-run have no impact on a firms decisions.
A generic firm can make three changes in the short-run:
- Increase production
- Decrease production
- Shut down
In the short-run, a profit maximizing firm will:
- Increase production if marginal cost is less than price;
- Decrease production if marginal cost is greater than price;
- Continue producing if average variable cost is less than price, even if average total cost is greater than price;
- Shut down if average variable cost is greater than price. Thus, the fixed cost is the largest loss a firm can incur in the short-run.
[edit] See also
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[edit] In Printing
A short run is slang for "a small order." Short runs sizes are different for the various sections of the printing industry (print media, screen printing, silk screening, etc). In most sectors, there are certain printers that specialize in short runs.
