short-run

Examples of short-run in the following topics:

• Short Run Firm Production Decision

  • Fixed costs have no impact on a firm's short run decisions.
  • However, variable costs and revenues affect short run profits.
  • In the short run, a firm that is maximizing its profits will:
  • The short run supply curve is used to graph a firm's short run economic state .
  • Compare factors that lead to short-run shut downs or long-run exits

• Reasons for and Consequences of Shifts in the Short-Run Aggregate Supply Curve

  • The short-run aggregate supply shifts in relation to changes in price level and production.
  • The short-run aggregate supply shifts in relation to changes in price level and production.
  • The equation used to determine the short-run aggregate supply is: Y = Y* + α(P-Pe).
  • The short-run curve shifts to the right the price level decreases and the GDP increases.
  • Identify common reasons for shifts in the short-run aggregate supply curve, Explain the consequences of shifts in the short-run aggregate supply curve

• Moving from Short-Run to Long-Run

  • In the short-run, the price level of the economy is sticky or fixed; in the long-run, the price level for the economy is completely flexible.
  • The short-run aggregate supply curve is an upward slope.
  • The short-run is when all production occurs in real time.
  • The aggregate supply moves from short-run to long-run when enough time passes such that no factors are fixed.
  • Recognize the role of capital in the shape and movement of the short-run and long-run aggregate supply curve

• Short Run and Long Run Costs

  • Long run costs have no fixed factors of production, while short run costs have fixed factors and variables that impact production.
  • In economics, "short run" and "long run" are not broadly defined as a rest of time.
  • Fixed costs have no impact of short run costs, only variable costs and revenues affect the short run production.
  • The main difference between long run and short run costs is that there are no fixed factors in the long run; there are both fixed and variable factors in the short run .
  • This graph shows the relationship between long run and short run costs.

• The Short-Run Phillips Curve

  • The short-run Phillips curve depicts the inverse trade-off between inflation and unemployment.
  • However, the short-run Phillips curve is roughly L-shaped to reflect the initial inverse relationship between the two variables .
  • Nowadays, modern economists reject the idea of a stable Phillips curve, but they agree that there is a trade-off between inflation and unemployment in the short-run.
  • Therefore, the short-run Phillips curve illustrates a real, inverse correlation between inflation and unemployment, but this relationship can only exist in the short run.
  • The short-run Phillips curve shows that in the short-term there is a tradeoff between inflation and unemployment.

• The Slope of the Short-Run Aggregate Supply Curve

  • In the short-run, the aggregate supply curve is upward sloping.
  • In the short-run, the nominal wage rate is fixed.
  • The equation used to calculate the short-run aggregate supply is: Y = Y* + α(P-Pe).
  • In the short-run, firms possess fixed factors of production, including prices, wages, and capital.
  • In the short-run the aggregate supply curve is upward sloping.

• Short Run Outcome of Monopolistic Competition

  • Monopolistic competitive markets can lead to significant profits in the short-run, but are inefficient.
  • If demand spikes, in the short run you will only be able to produce the amount of good that the capacity of the factory allows.
  • The "short run" is defined by how long it would take to alter that "fixed" aspect of production.
  • In the short run, a monopolistically competitive market is inefficient.
  • Examine the concept of the short run and how it applies to firms in a monopolistic competition

• Introducing Aggregate Supply

  • In the short-run, the aggregate supply is graphed as an upward sloping curve.
  • The equation used to determine the short-run aggregate supply is: Y = Y* + α(P-Pe).
  • The short-run aggregate supply curve is upward sloping because the quantity supplied increases when the price rises.
  • In the short-run, firms have one fixed factor of production (usually capital).
  • As a result, there is a positive correlation between the price level and output, which is shown on the short-run aggregate supply curve.

• Explaining Fluctuations in Output

  • In the short run, output fluctuates with shifts in either aggregate supply or aggregate demand; in the long run, only aggregate supply affects output.
  • There are noticeable differences between short-run and long-run fluctuations in output.
  • Over the short-run, an outward shift in the aggregate supply curve would result in increased output and lower prices.
  • Short-run nominal fluctuations result in a change in the output level .
  • In the short-run an increase in money will increase production due to a shift in the aggregate supply.

• Government Activity

  • Government activity and policies have a direct impact on long-run growth.
  • The long-run economic growth is determined by short-run economic decisions.
  • Long-run growth can be redirected and improved when changes are made to short-run actions.
  • This helps to control excess inflation and excess short-term growth, both of which can negatively affect long-run growth.
  • Government activity impacts long-run growth.