Consider the following statements:
(A) In the short run, at least one factor of production cannot be varied.
(B) The cost that a firm incurs to employ its fixed inputs is called the total variable cost.
(C) In the short run, the firm can vary its output only by varying the variable factor.
(D) In the short run, a change in total cost is entirely due to a change in total variable cost.
(E) A fixed input is an input which cannot be varied in the long run.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (C) and (D) only
In the short run, some inputs stay fixed. Only the variable inputs can change.
(A) In the short run, at least one factor of production cannot be varied. — Correct. That is what makes a period the short run.
(B) The cost that a firm incurs to employ its fixed inputs is called the total variable cost. — Incorrect. The cost of fixed inputs is the total fixed cost.
(C) In the short run, the firm can vary its output only by varying the variable factor. — Correct. The fixed factor cannot change, so output changes only through the variable factor.
(D) In the short run, a change in total cost is entirely due to a change in total variable cost. — Correct. Fixed cost cannot change in the short run, so any change in TC is a change in TVC.
(E) A fixed input is an input which cannot be varied in the long run. — Incorrect. A fixed input cannot be varied in the short run. In the long run all inputs can be varied.
NCERT (2026-27): “3.2 The Short Run and the Long Run … In the short run, at least one of the factor – labour or capital – cannot be varied, and therefore, remains fixed. In order to vary the output level, the firm can vary only the other factor. The factor that remains fixed is called the fixed factor whereas the other factor which the firm can vary is called the variable factor.” “3.7.1 Short Run Costs We have previously discussed the short run and the long run. In the short run, some of the factors of production cannot be varied, and therefore, remain fixed. The cost that a firm incurs to employ these fixed inputs is called the total fixed cost (TFC). Whatever amount of output the firm produces, this cost remains fixed for the firm. To produce any required level of output, the firm, in the short run, can adjust only variable inputs. Accordingly, the cost that a firm incurs to employ these variable inputs is called the total variable cost (TVC). Adding the fixed and the variable costs, we get the total cost (TC) of a firm …” “3.7.1 Short Run Costs … Just like the case of marginal product, marginal cost also is undefined at zero level of output. It is important to note here that in the short run, fixed cost cannot be changed. When we change the level of output, whatever change occurs to total cost is entirely due to the change in total variable cost.” Glossary: “Fixed input – An input which cannot be varied in the short run is called a fixed input.” |