What factors of production can a firm change in the short run? In the long run?
What will be an ideal response?
In the short run, the firm can change its variable factors of production, such as labor. The firm cannot change its fixed factors of production, such as its capital stock. The factors of production the firm cannot change are called its "plant." In the long run, the firm can change all of its factors of production. Indeed, the long run is defined as the period of time long enough so that the firm can change all of its factors of production.
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Which of the following purchases is included in the calculation of gross domestic product?
a) a used economics textbook from the bookstore b) new harvesting equipment for the farm c) 1,000 shares of stock in a computer firm d) a car produced in a foreign country e) government bonds issued by a foreign firm
You need a new computer, and you will need a loan in order to buy one. Which lender is most likely to charge you the highest interest rate on your loan?
(A) Savings bank (B) Savings and loan association (C) Credit union (D) Finance company