76. The short run is characterized by

A. plenty of time for firms to either enter or leave the industry.
B. increasing but not diminishing returns.
C. fixed plant capacity.
D. zero fixed costs.

Question

76. The short run is characterized by

A. plenty of time for firms to either enter or leave the industry.
B. increasing but not diminishing returns.
C. fixed plant capacity.
D.  zero fixed costs.

BlackTom AI · Accepted Answer

When evaluating the short run in the context of production and costs, we start by identifying what is fixed and what can vary. 
Option A states there is plenty of time for firms to enter or leave the industry; this describes the long run, not the short run, where firms cannot freely enter or exit due to fixed plant and other constraints. 
Option B claims increasing but not diminishing returns; however, standard short-run analysis typically features diminishing marginal returns once a variable input is added to a fixed input, so this phrasing is misleading about the typical pattern in the short run. 
Option C asserts fixed plant capacity; this aligns with the defining characteristic of the short run: at least one input (notably capital or plant) is fixed, limiting adjustments to output. 
Option D claims zero fixed costs; in the short run, fixed costs exist exactly because some inputs cannot be changed, so this statement is incorrect. 
Thus, after weighing the statements, the one that correctly identifiers the short-run feature is that plant capacity is fixed, while other inputs vary to some extent, producing the usual short-run cost and production behaviors.

ECNM1116.32924.202530 Microeconomics Final; Spring 2025, 100 Multiple Choice Questions

76. The short run is characterized by A. plenty of time for firms to either enter or leave the industry. B. increasing but not diminishing returns. C. fixed plant capacity. D. zero fixed costs.

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