A firm incurs short-run costs when

In economics, short-run costs are the costs incurred by a firm when some of its inputs are fixed, and cannot be varied. In other words, in the short-run, a firm cannot adjust its production to changes in demand, and must continue operating with the resources it has. As a result, if the firm wants to produce more output, it will have to increase the use of its fixed inputs, such as capital, and this will result in an increase in short-run costs. The other options listed are not necessarily true in all cases and do not provide an accurate explanation of short-run costs.