Question

Differentiate between fixed factor production and variable factor of production.

Answer 1

Sr. No.	Basis	Fixed Factor of Production	Variable Factor of Production
1.	Meaning	Inputs whose quantity cannot be changed in the short run.	Inputs whose quantity can be changed with output level.
2.	Time Period	Remains unchanged in the short run.	Varies directly with production even in the short run.
3.	Examples	Land, machinery, building, factory premises.	Labour, raw materials, electricity, packaging.
4.	Relation to Output	Does not change with the level of output.	Changes directly with the level of output.
5.	Cost Incurred	Involves fixed cost (constant in the short run).	Involves variable cost (changes with output).
6.	Importance	Determines the scale or capacity of production.	Helps adjust actual production volume based on demand.