The difference between the short-run and long-run production function.
Explanation of Solution
The production function is the process of transformation of inputs into outputs, which lead to value addition. A production function determines the maximum quantity of outputs that can be produced with the given quantity of inputs. A short run refers to a time period in which only a single factor of production is variable. Thus, a short-run production function refers to the maximum quantity of output that can be produced by changing the quantity of the variable factor. The long run is a time period in which all the factors of production can be changed. Thus, the long-run production function refers to the maximum quantity of outputs that can be produced by changing all the factors of production.
Production function: Production functions express the relationship between inputs and outputs assuming that there is no change in technology.
Short run: Short run refers to the time period in which only a single factor of production changes, and the others remain fixed.
Long run: Long run refers to the time period in which all the factors of production change.
Want to see more full solutions like this?
Chapter 6 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningPrinciples of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax