There are numerous costs that producers of various products and services encounter in their operations aiming at making profits and expanding their activities. These costs are categorized in the short-run and long-run depending on their nature and other features (Mukherjee et al., 2003; Tisdell & Hartley, 2008). These costs are based on the economic notion that in the short-run, the firm is faced with two types of costs, which are fixed and variable costs respectively. These indicate that there are those aspects whose costs can be adjusted while there are those that remain fixed at least during this period. According to Baumol Blinder (2012), the long-run is characterized by costs that are variable in nature in the sense that the firm has enough time to weigh its options regarding factors of production to facilitate productivity, efficiency, and profitability.
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