State the difference between short-term and long-term production funct

1.	State the difference between short-term and long-term production function.
Answer» Short-term: Short-term is a period in which some factors are fixed and some factors are variable. Fixed factors have fixed cost and variable factors have variable cost. Long-term: Long period or long-term is defined as that period of time in which all factors of production or inputs are variable. In the long-term, all inputs become variable, i.e. the scale of production itself can be changed by installing new plant and equipment and hiring more labour and other factor inputs. In short-term, the proportion of fixed and variable factors keep on changing along with the change in production. On the contrary, in the long-term, all factor inputs can be varied.

State the difference between short-term and long-term production function.

Answer»

Short-term: Short-term is a period in which some factors are fixed and some factors are variable. Fixed factors have fixed cost and variable factors have variable cost.

Long-term: Long period or long-term is defined as that period of time in which all factors of production or inputs are variable. In the long-term, all inputs become variable, i.e. the scale of production itself can be changed by installing new plant and equipment and hiring more labour and other factor inputs.

In short-term, the proportion of fixed and variable factors keep on changing along with the change in production. On the contrary, in the long-term, all factor inputs can be varied.

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