“Returns to a variable factor operates in the long period." True … - Vidyadip

Question

“Returns to a variable factor operates in the long period." True or False? Give reason in support of your answer.

✓

Answer

False.
Explanation:
Yes indeed the statement is wrong because ‘Returns to a variable factor' operates in the short period and not in long period, as stated. In short period, firm cannot vary all the inputs. In order to vary the level of output, the firm can vary only the variable inputs, as some inputs remain fixed in the short run.

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