In Economics, What Is a Short-Run?

Short-term costs are the costs incurred when a manufacturer does not change its production scale, that is, the amount of input of fixed assets such as equipment and plants, and only changes the input of raw materials, fuel, labor, etc. Short-term costs can be divided into fixed costs and variable costs. Western economists generally use Marshall's division method, which is based on whether economic variables such as capital stock are assumed to be constant throughout the period of investigation and whether they are determined to be the object of investigation. For example, assuming that economic variables such as capital stock remain unchanged during the survey period, the period is considered short-term, such as one week, one month, one year, and so on. In contrast, the time it takes for slow changes in these economic variables to reach a significant level is called long-term. But in different industries and enterprises, the short-term and long-term terms are not the same. ^[1]

Short-term costs

Short run cost

The so-called short-term means that the manufacturer cannot adjust its production scale during this period, that is,

Short-term costs

Long-term costs