Factors that affect how businesses move from short-run to long-run production include:
Variable Inputs: In the short run, some things, like money or equipment, can’t be changed. But in the long run, a business can change everything it uses to create its products.
Economies of Scale: When businesses make more products, they can often do it for less money per item. For example, if a company doubles its production, the average cost of each item might drop by 10%.
Technological Advances: New technology can help businesses produce more with the same amount of resources. This means they can make more products without needing to use more materials.
Input Prices: When the costs of things like labor go up, it can change how much a business decides to produce. For example, if labor costs increase by 5%, it might make a business rethink how much it should make in the long run.
Factors that affect how businesses move from short-run to long-run production include:
Variable Inputs: In the short run, some things, like money or equipment, can’t be changed. But in the long run, a business can change everything it uses to create its products.
Economies of Scale: When businesses make more products, they can often do it for less money per item. For example, if a company doubles its production, the average cost of each item might drop by 10%.
Technological Advances: New technology can help businesses produce more with the same amount of resources. This means they can make more products without needing to use more materials.
Input Prices: When the costs of things like labor go up, it can change how much a business decides to produce. For example, if labor costs increase by 5%, it might make a business rethink how much it should make in the long run.