In the short run, what is true about factors of production?

In the short run, it is true that at least one factor of production is fixed. This concept is fundamental to understanding how firms operate in the short run versus the long run. In the short run, businesses have certain resources or inputs that cannot be changed; these are typically capital assets like buildings, machinery, or equipment. While firms can vary some factors of production, such as labor or raw materials, they cannot adjust fixed factors without incurring significant costs or making long-term plans.

This limitation affects the firm's production level and cost structure. For instance, if a firm wishes to increase output in the short run, it can hire more workers to utilize its fixed production capacity. However, it cannot build a new factory or purchase new machinery instantaneously; that would be a long-run decision. Therefore, the presence of fixed factors in the short run plays a crucial role in how firms make production decisions and respond to changes in demand.