alleryStart learning →The short run for a perfectly competitive firm. What defines this period?
AThe firm has one fixed input and incurs fixed costs
BThe firm has already left the market entirely
CAll of the firm's inputs can be freely adjusted
DThe firm has no costs of production at all
Answer & Solution
Correct answer: A. The firm has one fixed input and incurs fixed costs
1. The source defines the short run for this example as a situation with one fixed input.
2. Because that input is fixed, the firm incurs fixed costs of production regardless of output.
3. Freely adjusting all inputs instead describes the long run, not the short run.
4. A firm with no costs at all is not the definition given for either time frame.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 8 "Perfect Competition", section 8.1 | Perfect Competition and Why It Matters_
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