3. “When a firm operates in the short-run, its cost of production may not be minimized”. Justify your position with the statement [You do not need to draw figure]
In the short run, it is not possible to increase the factors of production suck as land, capital, machinery etc, and hence we can say that in short run, the firms are having limited options to produced goods and to increase its production - since in short run, only factor of production can be changed that is labor and all other factors of production cannot be changed. Therefore in short run , the firm cannot minimized its production by producing efficiently and hence firms are experiencing high cost in short run than in long run.
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