SELECT * FROM question_mgmt as q WHERE id=10252 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=60 AND chapterId=610 and ex_no='1' AND status=1 ORDER BY CAST(question_no AS UNSIGNED) CBSE Free NCERT Solution of 12th micro-economics Production and Costs explain the concepts of the short run and the long

Question:

Explain the concepts of the short run and the long run. 

Answer:

Short Run: In short run, a firm cannot change all the inputs, which means that the output can be increased (decreased) only by employing more (less) of the variable factor (labour). It is generally assumed that in short run a firm does not have sufficient or enough time to vary its fixed factors such as, installing a new machine, etc. Hence, the output levels vary only because of varying employment levels of the variable factor. Algebraically, the short run production function is expressed as
Qx= f (L,K)
Where,
Qx = units of output x produced
L = labour input
K = constant units of capital

Long Run: In long run, a firm can change all its inputs, which means that the output can be increased (decreased) by employing more (less) of both the inputs − variable and fixed factors. In the long run, all inputs (including capital) are variable and can be changed according to the required levels of output. The law that explains this long run concept is called return to scale. The long run production function is expressed as
Qx= f (L,K)
Both L and K are variable and can be varied.


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