Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Explain the concepts of the short run an
Explain the concepts of the short run and the long run.
Short Run: In short run, a firm cannot change all the inputs, which means that the output can be increased (decreased) only by employing more (less) of the variable factor (labour). It is generally assumed that in short run a firm does not have sufficient or enough time to vary its fixed factors such as, installing a new machine, etc. Hence, the output levels vary only because of varying employment levels of the variable factor. Algebraically, the short run production function is expressed as
Qx= f (L,K)
Where,
Qx = units of output x produced
L = labour input
K = constant units of capital
Long Run: In long run, a firm can change all its inputs, which means that the output can be increased (decreased) by employing more (less) of both the inputs − variable and fixed factors. In the long run, all inputs (including capital) are variable and can be changed according to the required levels of output. The law that explains this long run concept is called return to scale. The long run production function is expressed as
Qx= f (L,K)
Both L and K are variable and can be varied.
More Questions From Class 12 Micro Economics - Chapter Production and Costs
- Q:-
What is the total product of input?
- Q:-
Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?
- Q:-
Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.
- Q:-
What does the average fixed cost curve look like? Why does it look so?
- Q:-
What do the long-run marginal cost and the average cost curves look like?
- Q:-
Explain the concept of a production function
- Q:-
When does a production function satisfy decreasing returns to scale?
- Q:-
Explain the relationship between the marginal products and the total product of an input.
- Q:-
Why is the short-run marginal cost curve 'U'-shaped?
- Q:-
At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer.
Popular Questions of Class 12 Micro Economics
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Explain market equilibrium.
- Q:-
Discuss the central problems of an economy.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
How do the equilibrium price and the quantity of a commodity change when the price of input used in its production changes?
- Q:-
Considering the same demand curve as in exercise 22, now let us understand for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained?
q*= 8+3p for p ≥ 20
= 0 for 0 ≤ p ≤ Rs 20
(a) What is the significance of p =20?
(b) At what price will the market for X be in equilibrium? State the reason for your answer.
(c) Calculate the equilibrium quantity and number of firms.
- Q:-
How is the optimal amount of labor determined in a perfectly competitive market?
- Q:-
Explain market equilibrium.
- Q:-
Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?
- Q:-
List the three different ways in which oligopoly firms may have.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by an ‘inferior good’? Give some examples
- Q:-
Explain why the budget line is downward sloping.
- Q:-
Distinguish between microeconomics and macroeconomics.
- All Chapters Of Class 12 Micro Economics
- All Subjects Of Class 12