Question 60

One or more inputs to production are fixed

In the short run, a firm is characterized by the presence of fixed inputs, which means that while some resources can be adjusted, at least one input remains constant. This limitation impacts the firm's production capabilities and decision-making processes.

A) All inputs to production are variable

This option is incorrect because if all inputs were variable, the firm would be operating in the long run. In the short run, at least one input must be fixed to define the operational constraints.

B) All inputs to production are fixed

This option is also incorrect, as it suggests a scenario where the firm cannot change any inputs at all. While the short run does involve fixed inputs, it does not mean that all inputs are fixed; some can be adjusted.

C) One or more inputs to production are fixed

This option is correct because it accurately describes the short run in economic terms. It indicates that while a firm can change some factors of production, at least one remains fixed, which fundamentally shapes its operational strategy.

D) Scale of operations can be increased

This option is incorrect in the context of the short run, as firms cannot change their scale of operations significantly when they are constrained by fixed inputs. The ability to scale operations typically relates to the long run, where all inputs can be adjusted.

Conclusion

The defining characteristic of the short run is that one or more inputs to production are fixed, which fundamentally affects a firm's operational decisions. Options A, B, and D fail to capture this essential aspect, while option C accurately reflects the constraints that firms face in the short run, making it the correct choice.