Describe the costs that are changing—are they fixed or variable costs for the firm’s production in the short-run decision regarding quantity of production (and what timeframe would they be fixed if they are fixed), how would those changing costs affect the marginal costs of the firm, and how would you expect a firm to respond to the change in input prices?

Describe the costs that are changing—are they fixed or variable costs for the firm’s production in the short-run decision regarding quantity of production (and what timeframe would they be fixed if they are fixed), how would those changing costs affect the marginal costs of the firm, and how would you expect a firm to respond to the change in input prices? In other words, what decisions would the firm change? Consider both the quantity of production and if the firm can or would substitute inputs. If the firm was a perfectly competitive market, how would the changing costs affect the price and number of transactions in the short run?