Pearson eText Microeconomics -- Instant Access (Pearson+)
9th Edition
ISBN: 9780136879572
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON+
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Chapter 6, Problem 1RQ
To determine
The difference between the short-run and long-run production function.
Expert Solution & Answer
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.
Economics Concept Introduction
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.
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