10.2 Short Run of production

The short run is a period of time in production process in which at least one input used for production and under the control of the producer is variable and at least one input is fixed.

The analysis of short-run production assumes that at least one input in the production process is fixed and at least one is variable.

Fixed Input

A fixed input is an input used in production and under the control of the producer that does not change with level of production.

Variable Input

A variable input is an input used in production and under the control of the producer that does change during the short run period of analysis.

The variable input used by most producers is labour. The fixed input for most production operations is usually the capital. The assumption is that the size of a firm's workforce can be adjusted more quickly that the size of the factory or building, the amount of equipment, and other capital.