What is in economics, what is short -term?

Short -term is an economic concept that concerns the period during which the production volume is necessarily determined because it is not possible to increase production capacity. Any moment in the short -term point is long -term; The main consequence is that the long -term is that the time sufficient to increase production capacity. Both short and long -term are important concepts for basic demand analysis and therefore for the analysis of market prices. Concepts can be applied to individuals, company, industry, sector or overall economy. This is because, by definition, there is not enough time for manufacturers to modify production capacity. In the long run, however, the capacity can be modified in accordance with the changed terms of supply or demand, so that the price is restored to its original level.

For example, if frost destroys sugar crop in Brazil, the world price of sugar would increase this season, because only one sugar crop can be planted each season. The production capacity of other supplier areas cannot be increased to make withE compensated for the loss of production capacity in Brazil. Sugar buyers around the world would offer a price to ensure a share of a limited offer, and the price would remain high until next season. From the short -term point of view, the price of sugar would increase. In the long run, the price would be restored to its normal level next season when Brazil returns to production.

Short -term running length varies depending on the time required to install new productive capacity. This in turn differs from industry to industry. The required time may depend on the amount and nature of the resources needed to expand the capacity, as well as the operating, regulatory or technical Constraints that apply.

For example, individual training as a hairdresser can increase its capacity faster than one training as a doctor. The office cleaning company can increase its production capacity faster than a source company that has to explore and find a new deposit of resources. The table manufacturer can increase its production capacity faster nThe satellite company can run a new satellite.