Which of the following is true-
a) Short run for a firm means a period less than a year
b) Long run for a firm means a period exceeding a year.

Both a and b are false

The correct answer is option 4: Both a and b are false

• The distinction between short run and long run in economics is not based on a fixed time period (like a year) but rather on the firm’s ability to adjust its factors of production.
• Short Run → A period in which at least one factor of production (such as capital or land) is fixed, and firms can only adjust variable inputs (like labor and raw materials).
• Long Run → A period in which all factors of production are variable, meaning firms can change capital, machinery, plant size, etc.
• Since short run and long run are not strictly defined by a time limit, both (a) and (b) are incorrect.