Short run versus long run, Microeconomics

The Short Run versus long Run

- Short-run:

  • Period of time in which the quantities of one or more production factors cannot be changed.
  • These inputs are called as fixed inputs.

- Long-run

  • Amount of time required to make the entire production inputs variable.

    1714_short run vs long run.png

    Observations:

 1)  With the additional workers, output (Q) increases, reaches the maximum limit, and then decreases.

  2) The average product of labor (or AP), or output per worker, increases 1st and then decreases.
1301_short run vs long run1.png

3) The marginal product of labor (or MP), or output of additional worker, increases quickly initially and then decreases and becomes negative.
1062_short run vs long run2.png


2430_short run vs long run3.png

401_short run vs long run4.png

Observations:

- When MP = 0, TP is at the maximum

- When MP > AP, AP is gets increased

- When MP < AP, AP  is gets decreased

- When MP = AP, AP is at the maximum

AP = slope of line from the origin to a point on TP, lines b, and c.

 MP = slope of a tangent to any point on the TP line, lines a and c.

Posted Date: 10/10/2012 9:21:48 AM | Location : United States







Related Discussions:- Short run versus long run, Assignment Help, Ask Question on Short run versus long run, Get Answer, Expert's Help, Short run versus long run Discussions

Write discussion on Short run versus long run
Your posts are moderated
Related Questions
Market failures (even when they do not have international external effects) i) Self-fulfilling bank runs, government debt runs, currency crises. ii) Liquidation costs of li

Illustrates the key terms of excise tax? Terms of excise tax: a. Tax incidence • Who bears the load of the tax? b. Excess burden or Deadweight loss • Taxes inflict

Female-headed households: The high incidence of unemployment among the educated in general and women in a particular reflects that the pace of creation of diversified employme

define statistics in plural and singular sense

Question: (a) The market demand schedule and market supply schedule for firm H is as follows: Q D = 500 - 10P Q S = -100 + 6P Where Q D and Q S denotes quantity de

ppc shows microeconomics

Why some country saving less and consumption more?


Explain the axioms of completeness, transitivity and non-satiation using appropriate examples.

A trend line can be fitted through a series graphically. Old values of sales for different areas are plotted on a graph and a free hand curve is drawn passing through as many point