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Question
Distinguish between short run and long run production functions
Solution
| Basis | Short-run Production Function |
Long-run Production Function |
| Factors of Production | Short run is a period of a time during which some factors of production are fixed and some factors of production are variable. |
A long run is a period of a time during which all factors of production are variable. |
| Production Function |
`q_x=f(x_1,bar(x_2))` where q represents units of output produced
|
q = f (x1, x2), where q represents units of output produced x1 represents capital units x2 represents labour units |
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