Asked by PERLA MENDIOLA on May 01, 2024
Verified
Suppose that Danita owns a cupcake bakery. In the short run, at least one of her inputs is fixed. Provide one or two examples of the types of inputs that could be fixed in the short run.
Fixed Inputs
Resources used in production that don't change in quantity as the level of production increases or decreases.
- Understand the distinction between short-term and long-term production periods.
Verified Answer
YS
Yesha SanakeyMay 01, 2024
Final Answer :
Danita's store size is likely to be fixed in the short run. Depending on how quickly she can purchase or lease additional capital such as mixers and ovens, some of her capital may be fixed in the short run. Danita can likely order more cupcake ingredients and hire more workers easily, so these types of inputs are likely to be variable in the short run.
Learning Objectives
- Understand the distinction between short-term and long-term production periods.