The correct answer is: B. Requires that at least one input is fixed.
In economics, the short run is a period of time in which at least one input is fixed. This means that the firm cannot change the quantity of that input, even if it wants to. The fixed input is usually capital, such as machinery or buildings. The variable inputs are those that the firm can change, such as labor or raw materials.
The short run is important because it is the period of time in which firms make most of their decisions. In the short run, firms cannot change their production capacity, so they must decide how to use the resources they have. They must also decide how to price their products, given the costs they face.
The long run is a period of time in which all inputs are variable. This means that the firm can change the quantity of any input, if it wants to. The long run is important because it is the period of time in which firms can make changes to their production capacity. They can also make changes to their product mix, if they want to.
Here is a brief explanation of each option:
- Option A: Is less than one year. This is not always the case. The short run can be any period of time in which at least one input is fixed. It does not have to be less than one year.
- Option B: Requires that at least one input is fixed. This is the correct answer. In the short run, at least one input is fixed. This means that the firm cannot change the quantity of that input, even if it wants to.
- Option C: Requires that all inputs are fixed. This is not always the case. The short run can be any period of time in which at least one input is fixed. It does not have to be the case that all inputs are fixed.
- Option D: Is just long enough to permit entry and exit. This is not always the case. The short run can be any period of time in which at least one input is fixed. It does not have to be the case that the short run is just long enough to permit entry and exit.