ECON101 Chapter Notes - Chapter 11: Marginal Product, Longrun, Fixed Cost
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ECON101 Full Course Notes
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Output and costs long run & short run - corresponds with. Short run- quantity of at least one factor of production is fixed. This is typically seen in firms- capital, land, entrepreneurship are fixed, labour is typically a variable factor. Both fixed and variable, only some resources are fixed, quantities of others are variable. To increase output in the short run, a firm must increase quantity of a variable factor of production, typically this is labour. A firm can increase or decrease output depending on how much labour it hires and amount of people working. Characteristics of production in the long run - quantities of all factors. Of production can be varied - the firm can change its plant. To increase output, the firm can change its plant. To increase output in the short run, firm must increase the quantity of labour employed. There are 3 different product schedules in the short run.