# Short-Run and Long-Run Production

What are Short-Run and Long-Run Production?

# What is Short-Run Production?

Economists differentiate between short and long run production.

The short run is the period of time during which at least some factors of production are fixed. During the period of the pizza restaurant lease, the pizza restaurant is operating in the short run, because it is limited to using the current building—the owner can’t choose a larger or smaller building.

The long run is the period of time during which all factors are variable. Once the lease expires for the pizza restaurant, the shop owner can move to a larger or smaller place.

Let’s explore production in the short run using a specific example: tree cutting (for lumber) with a two-person crosscut saw.

Since by definition capital is fixed in the short run, our production function becomes

Q = f [L, K− ] or Q = f [L]

This equation simply indicates that since capital is fixed, the amount of output (e.g. trees cut down per day) depends only on the amount of labor employed (e.g. number of lumberjacks working).

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