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Define the terms: Long run and short run

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What is the shut down rule in the short run? What is the shut down rule in the long run?

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Solution Summary

This soultion provides insight into the the definition of Short and Long Run

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The short-run

"In economics the short run is defined as a period of time when at least one of the four factors of production is fixed in supply. Remember that the four factors are, land, labour, capita and entrepreneurship. "
(Chris Rodda 2004, www.cr1.dircon.co.uk/TB/2/shortandlongrun.htm)

"The simple rule for short run shut down in perfect competition is:
If P > AVC operates in the short run:
If price is above ...

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