Mini lessons / Microeconomics / 3.1
3.1 The production function
Why does the third worker at a smoothie stand add more than the first, but the sixth adds almost nothing?
Step 1 of 5
Short run vs long run
In the short run, at least one input is fixed. Think of a smoothie stand with one blender. You can hire more workers today, but you can't build a bigger kitchen by tomorrow.
In the long run, every input can change: more blenders, a bigger shop, a second location.
Key ideaShort run = at least one fixed input. Long run = all inputs variable.