Short Run and Long Run Costs Assignment Help

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Short Run and Long Run Costs

Short run costs are the costs incurred on the variable inputs in the short run. They vary with the variation in output within a given plant capacity. Long run costs are the costs incurred on the fixed inputs. They are costs across all possible capacities. Knowledge of short run costs is useful for pricing and output decisions and long run costs provide information for planning the growth and investment policies of the firm. 

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