The short run in economics is a period during which at least one of a firm's inputs is fixed and cannot be changed. In this case, the short run would be the duration of the lease (one year) because the restaurant space cannot be changed during this time. The long run is a period during which all factors of production and costs are variable. In this case, the long run would begin after the lease expires, as the restaurant could then change its location if desired. The opportunity cost being ignored by the company could be the potential income that the manager could have earned if he had taken up a job elsewhere instead of managing the restaurant without a salary. In the short run, the restaurant cannot add more space because the lease is fixed for one year. However, in the long run, they could potentially move to a larger location or negotiate for more space in their current location. Variable costs are costs that change with the level of output. In this case, the variable costs would include the wages of the employees (as more staff could be hired or existing staff laid off depending on the restaurant's needs), the cost of food and drink supplies, and the payment to the social media company (as the contract can be terminated at any time). Fixed costs are costs that do not change with the level of output. In this case, the fixed costs would include the lease on the restaurant space, the cost of the furniture, sign board, Wi Fi, webpage design, and the cost of the coffeemakers, cups, mugs, plates, and cutleries (as these are one-time purchases that do not change regardless of how many customers the restaurant serves?

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Answer Heres a breakdown of your points Short Run vs Long Run Short run Lease duration one year wher... View the full answer