In the short run TPP changes with the change in which of the following factorsa)Economic costb)Fixed factorsc)Variable factorsd)All the factorsCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

When we employee more units of variable factor(labour) on fixed factor(land) then at the end of the point total production (tp) decrease because of more labour.

Answer

When we employee more units of variable factor(labour) on fixed factor(land) then at the end of the point total production (tpp) decrease because of more labour.

Answer

In the short run, TPP (Total Physical Product) changes with the change in variable factors. Let's dive into the details of each factor and why variable factors have the most significant impact on TPP in the short run.

1. Economic cost:
Economic cost refers to the total cost incurred in the production of goods or services, including both explicit costs (such as wages, rent, and raw materials) and implicit costs (such as opportunity costs). While economic cost is an important consideration in production decisions, it does not directly determine the changes in TPP. Therefore, option 'A' is not the correct answer.

2. Fixed factors:
Fixed factors of production are those that cannot be easily changed in the short run, such as the size of a factory, the number of machines, or the amount of land available. Since these factors remain constant in the short run, any changes in TPP cannot be attributed to the variation in fixed factors alone. Thus, option 'B' is not the correct answer.

3. Variable factors:
Variable factors of production are those that can be easily adjusted in response to changes in output levels. Examples include labor, raw materials, and components. Any changes in the quantity or quality of these variable factors can directly influence the level of TPP. By increasing the amount of variable factors, such as hiring more workers or using more raw materials, the total physical product can be increased. Conversely, reducing the variable factors may lead to a decrease in TPP. Therefore, option 'C' is the correct answer.

4. All the factors:
While all factors of production (both fixed and variable) play a role in determining the level of TPP, the question specifically asks about the short run. In the short run, fixed factors cannot be easily adjusted, so any changes in TPP primarily depend on the variation in variable factors. Thus, option 'D' is not the correct answer.

In conclusion, the correct answer is option 'C' because in the short run, TPP changes with the change in variable factors. Variable factors, such as labor and raw materials, can be easily adjusted to increase or decrease the level of TPP.

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