Which of the following scenarios best illustrates the difference between short-run and long-run profit maximization for a firm, considering cost-benefit analysis?

In the short run, a firm focuses on maximizing profit by making decisions based on current costs and revenues, often adjusting production levels to meet immediate demand. For example, a bakery might decide to bake more bread if it sees a sudden increase in customers, even if it means paying overtime to workers. In contrast, long-run profit maximization involves planning for the future, considering how to reduce costs and increase efficiency over time. For instance, the bakery might invest in a new oven that can bake bread faster and cheaper, knowing that this will lead to higher profits in the future. Therefore, while short-run decisions are about quick responses to market changes, long-run decisions are about sustainable growth and efficiency.