Short run

Short run is usually presented as one in which some expenditure can not be avoided. However, if such expenditure can not be avoided, its value can not account for cost.

I propose to interpret the short run rather as one kind of production engineering in which some expenditure is common to all production or independent of the quantity of produced units. In such a case the value of such common expenditure has to be regarded as cost.

This, however, implies that it can not be accepted in praxeology such a category as ex-ante losses in the short run (neither in the long run). When the agent is choosing between producing or not, he is free for disposing of common expenditure. He has to decide between producing (in which case he will have to incur in common expenditure as well as expenditure particular for each unit produced) or not producing (remaining, this way, without the charge even of common expenditure).

So, the short run supply function does not exist for magnitudes of the marginal (particular) expenditure above the average particular expenditure but only for magnitudes of that marginal expenditure above the average total expenditure.

By the way, it has to be remembered that such supply is not a supply of previously produced goods (in which case there would be a produced stock and the supply would depend exclusively on the owner-supplier's preference). The short run (as well as the long run) supply functions are necessarily supplies of not yet produced goods; i.e. they are no more than schedules in the head of the deliberating agent confronting the decision of whether producing or not. He will produce (and eventually supply) exclusively if he expects to earn a profit.

If the producer actually faces a situation in which he can not change certain element adjuvant in the production process, that is not a matter of cost but one of production function's shape, of technology, of the information the agent has in order to produce. What happens can be modeled as producer ignorance regarding how to push the production opportunities out, as the arriving at the production-possibility frontier. It can, however, not possibly be modeled as a "fixed cost", which is an oxymoron. Cost only emerges when there is choice, when the option can actually be rejected, when it is "flexible", when it is "not fixed". If the situation is given, fixed, you are not talking about cost, you are talking about a general condition of welfare. You maybe are in the realm of a science of happiness or welfare but you are certainly no more in the realm of a science of purposeful behavior, of economics.

Other feature about the relation between common and particular expenditure, not usually taken into account, is that there can be expenditure common only to certain quantities of production, a sort of "crawlingly-pegged" expenditure.