The short run and the long run are two separate time horizons in microeconomics that the company is considered to function in. These times don't line up with the calendar. Rather, they are described in terms of the inputs of the company. All factors of production are changeable in the short term, with the exception of at least one fixed element of production, which is often capital the company's structures, equipment, and other permanent inputs. All expenses related to capital are referred to as fixed costs since capital is fixed in the near term. The company may essentially overlook such expenses in the near term: Whether the company produces nothing at all or 10 million units of product, they will still be incurred. Only variable costs, which increase or decrease based on how much output the business creates, are subject to short-term change. The long run differs from the short run in that all production factors turn into variables. Fixed expenses are no longer present. New businesses may join the market, while established businesses may increase their output capacity or completely exit the sector.
