A manufacturing firm wants to predict how it can increase its output over the next few weeks to meet a sudden rise in orders. In creating a short-term production model, an economist assumes the amount of labor can be changed, but the number of machines and the size of the factory must remain constant. What is the most likely reason for treating these inputs differently in the model?
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A manufacturing firm wants to predict how it can increase its output over the next few weeks to meet a sudden rise in orders. In creating a short-term production model, an economist assumes the amount of labor can be changed, but the number of machines and the size of the factory must remain constant. What is the most likely reason for treating these inputs differently in the model?
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