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in Class 12 by kratos

What is short-run production function ? What is meant by returns to a factor ?

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+2 votes
by kratos
 
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In variable proportion production function, proportion of factors utilised changes because in short-run, all factors cannot be changed. Those factors which cannot be changed due to short **, are called fixed factors. Few factors of production are variable in the short-run- Capital, Capital goods, land, production technique, etc. are mainly fixed factors or remain unchanged in short ** while labour units are variable. Size of plant also *** unchanged in short-run-In this way, few factors of production are fixed and few are variable in short-run By changing variable factors ratio of factors utilized also changes and consequently quantity of production or output varies. This is called’ variable Proportion production Function’.

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