The cookie is used to store the user consent for the cookies in the category "Performance". This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. The cookies is used to store the user consent for the cookies in the category "Necessary". The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The cookie is used to store the user consent for the cookies in the category "Analytics". These cookies ensure basic functionalities and security features of the website, anonymously. Necessary cookies are absolutely essential for the website to function properly. The short-run production function can be mathematically expressed as follows:
Therefore, on the basis of time period, production function can be classified in two types, namely, short-run production function and long-run production function. On the other hand, in the long- run, the organization can increase labor and capital both for increasing the level of production.
In such a case, the organization only increases labor to increase the level of production. In short-run, the supply of capital is inelastic (except for individual organization in perfect competition). On the basis of time period required to increase production, an organization decides whether it should increase labor or capital or both.Īn organization takes into account either long- run production or short-run production for increasing the level of production. The production of diamonds would increase with the increase in labor and capital. This production function implies that quantity of diamond production depends on labor engaged in producing diamond and capital required to carry out production.
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