Stan owns a software design business.He does not have time to expand his office space or redesign the layout of his office.He can increase the amount of work he does by working more hours, asking his current employees to work more hours, or hiring more employees.The relationship between Stan's inputs and the maximum output his firm can produce is called his
A)long-run production function.
B)production possibility frontier.
C)short-run production function.
D)cost function.

Question

Quizplus · Accepted Answer

Since Stan does not have time to expand his office space or redesign the layout, he is limited by his short-run production function. This means that he can only increase output by working more hours, asking his current employees to work more hours, or hiring more employees in the short run. Therefore, he should focus on increasing the hours worked by himself and his current employees or hiring more employees to increase output in the short run.

Stan Owns a Software Design Business