Question

For an airport, identify the likely fixed factors of production that define the short run.

Answer 1

Factors of production are input available to supply the goods and services in the economy.

There are four factors of productions

Land, labour, capital and enterprise.

Land - Natural Resource

Labour- Human resource

Capital - Goods used in supply such as machinary

Enterprises -Organise factors of production and take risks.

Fixed factors of productions are those input which cannot change in short run.

Fixed factors of production in airways industry

Is Land used for airports

Capital which are airplanes.

In short run number of enterperises in short run cannot increase or decreases therefore flight companies/ enterprises are also constant.

Therefore enterprise are also fixed factor of production in airways business.

Only labour is variable factor of production in short run.

All the best.

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