Question
Differentiate between Short Period and Long Period.
|
SNo.
|
Short Period
|
Basis
|
Long Period
|
|
1.
|
A short period refers to the period of time in which a firm cannot change some of its factors like plant, machinery, building, etc. due to insufficiency of time but can change any variable factor like labour, raw material, etc.
|
Meaning
|
A long period, on the other hand, is a time period during which a firm can change all factors of production including machines, building, organization etc.
|
|
2.
|
Output can only be increased by changing the quantity of variable factors.
|
Output
|
Output can be increased by making changes in the quantity of both fixed as well as the variable factor inputs.
|
|
3.
|
Factors of production here can be grouped in two categories:
* Fixed Factors
* Variable Factors
|
Classification
|
In the long period, the distinction between the fixed and the variable factors disappear.
|
|
4.
|
Demand here plays a dominant role in the determination of price of a commodity
|
Effects
|
In the long period, supply can be adjusted to any change in demand. So, demand and supply play equal role in price determination.
|
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.
| Output (unit) | 1 | 2 | 3 | 4 |
| Marginal Cost (MC) (₹) | 6 | 5 | 4 | 6 |
|
Total Output
(Units)
|
Total Cost (Rs)
|
|
0
|
120
|
|
1
|
180
|
|
2
|
200
|
|
3
|
210
|
|
4
|
230
|
|
5
|
270
|
|
6
|
360
|