Explain the difference between the short run and the long run as it relates to the firm's production function. Why is this distinction important to a firm's manager?

What will be an ideal response?

In the short run, the amount of at least one input employed by the firm, usually capital, is fixed while other inputs are allowed to vary. This reflects the fact that it is usually difficult or impossible to change the amount of capital employed by the firm in a shorter amount of time. In contrast, the amount of inputs such as labor that are employed can be changed almost instantaneously. In the long run, all of the inputs employed by the firm, including capital, can be varied. This distinction is important because it defines the set of possible responses a firm's manager can employ in response to a change in market conditions, such as a sudden decrease in demand. In the short run, the manager is limited to adjusting the amounts of variable inputs employed, while in the long run all of the inputs employed by the firm can be adjusted.