The production function of a restaurant includes items such as labor (i.e. ,cooks,waiters,and a manager),capital (i.e. ,ovens,counters,tables,chairs,and a building),and land.In the short run,the owner of the restaurant will optimize production by employing a variable amount of ________ given a fixed amount of ________.

Question

Quizplus · Accepted Answer

In the short run, the owner of the restaurant can vary the amount of labor employed, but cannot easily adjust the amount of capital or land. Therefore, the optimal choice would be to vary labor given a fixed amount of capital and land. Choice C correctly reflects this relationship.

The Production Function of a Restaurant Includes Items Such as Labor