Question

. Distinguish the long-run production from the short-run and explain the various long run production function with the help of isoquants.

Answer 1

short run production function:

In short run, some factors of production are always fixed, like capital usage, these factors cant be adjusted in accordance with the production level & other factors are always variable like Labor .

thus at least one production factor is fixed , thus in short run, a producer lacks flexibility in terms of usage of resources, as the production level vary.

Hence no change in scale of production is possible.

Law of variable proportions hold bcoz of presence of variable inputs.

Hence no fixed factor ratio exists, due to fixed factor. , Input factor ratio is variable .

long run production function:

All resources are variable. No resource is fixed.

Law of returns to scale holds

In long run, cost minimising optimal input factor ratio is constant.

Change in scale of production is possible bcoz all inputs are variable.

Long run production function isoquants are convex to the origin & their position depends upon the production functional form & the level of production.

For q = f(k,L)

Isoquant map