Which of the following are short-run and which are long-run...

Name: Problem 2, Chapter 9: Economics: Principles, Problems, and Policies
Uploaded: 2021-02-22T07:30:17-08:00
Duration: 1 min 22 s
Channel: Oluwadamilola Ameobi
Description: Which of the following are short-run and which are long-run adjustments? a. Wendy's builds a new restaurant. b. Harley-Davidson Corporation hires 200 more production workers. c. A farmer increases the amount of fertilizer used on his com crop. d. An Alcoa aluminum plant adds a third shift of workers.

Which of the following are short-run and which are long-run adjustments? a. Wendy's builds a new restaurant. b. Harley-Davidson Corporation hires 200 more production workers. c. A farmer increases the amount of fertilizer used on his com crop. d. An Alcoa aluminum plant adds a third shift of workers.

Which of the following are short-run and which are long-run adjustments?
a. Wendy's builds a new restaurant.
b. Harley-Davidson Corporation hires 200 more production workers.
c. A farmer increases the amount of fertilizer used on his com crop.
d. An Alcoa aluminum plant adds a third shift of workers.

Labs

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs

Key Concepts

Short-run Adjustments

Short-run adjustments refer to production changes made when at least one input, such as capital, is fixed. In this period, firms can only adjust variable inputs like labor or raw materials, leading to temporary changes in production levels without altering the overall capacity or structure of the business.

Long-run Adjustments

Long-run adjustments occur when all inputs are variable, allowing a firm to modify its production capacity, scale, and overall structure. These adjustments often involve investments in new infrastructure, technology, or facilities, reflecting fundamental changes to the firm's operational base over time.

Fixed and Variable Inputs

The distinction between fixed and variable inputs is central to understanding short-run versus long-run adjustments. In the short run, some inputs such as buildings or heavy machinery remain constant, forcing firms to adjust only variable inputs, whereas in the long run, all inputs can be modified to optimize production.

Capacity Expansion

Capacity expansion is a strategic, long-run decision where a firm increases its production capability by investing in new facilities or technology. This process generally involves significant capital investment and planning, highlighting the separation between immediate operational changes and longer-term structural growth.

Transcript

Please give Ace some feedback