what is a difference btween long run and short run

Question

anonymous · Answer

in terms of cost

anonymous · Answer

Generally cost have varied effects in long run and short run. For example , in short run ( limited time period , say few months-few years ) capital cannot be increased by a firm , and the labor operate within that limited capital. It may lead to diminishing marginal returns for the firm. However in long run , that firm does not have capacity constraint , and may increase the capital according to the labor. Talking about long run , we deal with the future ,  relaxing the constraints , but in short run i.e., limited time frame , the firm is bound with many restrictions.

anonymous · Answer

Well according to Keynes and I firmly agree with him....

"The long run is a misleading guide to current affairs. In the long run we are all dead. "

John Maynard Keynes, A Tract on Monetary Reform (1923)