In the mathematical formulation of the short-run production function:
A)the quantity of output is usually assumed to be fixed.
B)the quantity of capital employed is usually assumed to be fixed.
C)the quantity of both labor and capital employed are usually assumed to be fixed.
D)the quantity of both labor and capital must be allowed to vary so that output can vary in the short run.

Question

Quizplus · Accepted Answer

In the short-run production function, it is typically assumed that the quantity of capital employed is fixed, while the quantity of labor can vary to adjust output levels. This reflects the idea that in the short run, firms can more easily adjust labor levels than capital investment.

In the Mathematical Formulation of the Short-Run Production Function