25C00100 - Entrepreneurship and Innovation Management, 01.11.2018-22.11.2018

Short run refers to a situation when one factor of production is held fixed. For example, tank capacity in Jane’s brewery is fixed in the short run because increasing it would require investments in further tanks, which she cannot do immediately. However, she can make such investments in the long run.

Supply curve depicts the quantities that a producer is willing to supply for different prices. This curve is upward sloping: a producer is happy to supply more if the price is high. On a market level, this also means that when the price is high, there are more suppliers willing to operate in the market.