CA Foundation Exam > CA Foundation Questions > The short run, as economists use the phrase, ...
Start Learning for Free
The short run, as economists use the phrase, is characterized by:
- a)at least one fixed factor of production and firms neither leaving nor entering the industry.
- b)a period where the law of diminishing returns does not hold.
- c)no variable inputs – that is all of the factors of production are fixed.
- d)all inputs being variable.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
The short run, as economists use the phrase, is characterized by:a)at ...
Short Run in Economics
Short run is a term frequently used by economists to describe a specific period of time in which at least one factor of production is fixed. In this period, firms are neither leaving nor entering the industry. Let's understand the characteristics of short run in detail.
Fixed Factor of Production
The short run is characterized by at least one fixed factor of production. The fixed factor of production refers to the input that cannot be changed or adjusted in the short run. For example, in the case of a bakery, the oven might be fixed in the short run, while the quantity of flour and sugar can be easily adjusted.
Firms Neither Leaving nor Entering the Industry
In the short run, firms are neither leaving nor entering the industry. This means that the number of firms in the industry remains constant. In simple terms, firms cannot enter the industry because it requires a long time to build new factories and install new machinery. Similarly, firms cannot leave the industry because they have already invested a large amount of money in the fixed factor of production.
Law of Diminishing Returns
The law of diminishing returns holds in the short run. It states that if one factor of production is fixed, then at some point, the marginal product of the variable factor of production will decline. For example, if a farmer has a fixed amount of land, he can only increase the yield by adding more labor and fertilizer. However, at some point, the marginal product of labor and fertilizer will decline.
Variable Inputs
In the short run, all inputs are not variable. Only one factor of production is fixed while the other factors of production can be varied. For example, in the case of a bakery, the oven might be fixed while the quantity of flour and sugar can be easily adjusted.
Conclusion
In conclusion, the short run is a period of time in which at least one factor of production is fixed. Firms neither leave nor enter the industry, and the law of diminishing returns holds true. Only one factor of production is fixed while the other factors can be varied.
Short run is a term frequently used by economists to describe a specific period of time in which at least one factor of production is fixed. In this period, firms are neither leaving nor entering the industry. Let's understand the characteristics of short run in detail.
Fixed Factor of Production
The short run is characterized by at least one fixed factor of production. The fixed factor of production refers to the input that cannot be changed or adjusted in the short run. For example, in the case of a bakery, the oven might be fixed in the short run, while the quantity of flour and sugar can be easily adjusted.
Firms Neither Leaving nor Entering the Industry
In the short run, firms are neither leaving nor entering the industry. This means that the number of firms in the industry remains constant. In simple terms, firms cannot enter the industry because it requires a long time to build new factories and install new machinery. Similarly, firms cannot leave the industry because they have already invested a large amount of money in the fixed factor of production.
Law of Diminishing Returns
The law of diminishing returns holds in the short run. It states that if one factor of production is fixed, then at some point, the marginal product of the variable factor of production will decline. For example, if a farmer has a fixed amount of land, he can only increase the yield by adding more labor and fertilizer. However, at some point, the marginal product of labor and fertilizer will decline.
Variable Inputs
In the short run, all inputs are not variable. Only one factor of production is fixed while the other factors of production can be varied. For example, in the case of a bakery, the oven might be fixed while the quantity of flour and sugar can be easily adjusted.
Conclusion
In conclusion, the short run is a period of time in which at least one factor of production is fixed. Firms neither leave nor enter the industry, and the law of diminishing returns holds true. Only one factor of production is fixed while the other factors can be varied.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer?
Question Description
The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer?.
The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer?.
Solutions for The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The short run, as economists use the phrase, is characterized by:a)at least one fixed factor of production and firms neither leaving nor entering the industry.b)a period where the law of diminishing returns does not hold.c)no variable inputs that is all of the factors of production are fixed.d)all inputs being variable.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup