Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Explain the concepts of the short run an
Explain the concepts of the short run and the long run.
Short Run: In short run, a firm cannot change all the inputs, which means that the output can be increased (decreased) only by employing more (less) of the variable factor (labour). It is generally assumed that in short run a firm does not have sufficient or enough time to vary its fixed factors such as, installing a new machine, etc. Hence, the output levels vary only because of varying employment levels of the variable factor. Algebraically, the short run production function is expressed as
Qx= f (L,K)
Where,
Qx = units of output x produced
L = labour input
K = constant units of capital
Long Run: In long run, a firm can change all its inputs, which means that the output can be increased (decreased) by employing more (less) of both the inputs − variable and fixed factors. In the long run, all inputs (including capital) are variable and can be changed according to the required levels of output. The law that explains this long run concept is called return to scale. The long run production function is expressed as
Qx= f (L,K)
Both L and K are variable and can be varied.
More Questions From Class 12 Micro Economics - Chapter Production and Costs
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What is the total product of input?
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When does a production function satisfy decreasing returns to scale?
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Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?
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What do the long-run marginal cost and the average cost curves look like?
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The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
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Explain the relationship between the marginal products and the total product of an input.
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What are the average fixed cost, average variable cost and average cost of a firm? How are they related?
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Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.
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What does the average fixed cost curve look like? Why does it look so?
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What is the law of diminishing marginal product?
Popular Questions of Class 12 Micro Economics
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What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
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From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
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6
2
2
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How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
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Recently Viewed Questions of Class 12 Micro Economics
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Using supply and demand curves show how an increase in the price of shoes affects the price of a pair of socks and the number of pairs of socks bought and sold.
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Considering the same demand curve as in exercise 22, now let us understand for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained?
q*= 8+3p for p ≥ 20
= 0 for 0 ≤ p ≤ Rs 20
(a) What is the significance of p =20?
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(c) Calculate the equilibrium quantity and number of firms.
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What do you mean by an ‘inferior good’? Give some examples
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A consumer wants to consume two goods. The prices of the two goods are Rs 4
and Rs 5 respectively. The consumer’s income is Rs 20.
(i) Write down the equation of the budget line.
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income on that good?
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that good?
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Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
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(a) A positively sloped straight line passing through the origin?
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Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
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Consider the demand curve D (p) = 10 – 3p. What is the elasticity at price 53?
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