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Questions
Distinguish between short-run and long-run production functions.
Explain how is short-run production function is different from long-run production function.
Differentiate between short-run and long-run production functions.
Distinguish between short-run and long-run.
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Solution
| Sr. No. | Basis | Short-run Production Function | Long-run Production Function |
| 1. | Definition | It refers to a situation where only one input is variable; the others are fixed. | It refers to a situation where all inputs are variable. |
| 2. | Expression | Expressed as: Qx = f(L) | Expressed as: Qx = f(K, L) |
| 3. | Change in Inputs | Studies the effect of change in one input (e.g., labour) only. | Studies the effect when all inputs are changed simultaneously. |
| 4. | Fixed Inputs | Some inputs (e.g., capital) remain constant. | There are no fixed inputs; all can be varied. |
| 5. | Output Response | Response of output is called Returns to a Factor. | Response of output is called Returns to Scale. |
| 6. | Related Law | Based on the Law of Variable Proportions. | Based on the Law of Returns to Scale. |
Notes
Students should refer to the answer according to the question.
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