Ace the A Level Economics AQA Exam 2025 – Power Up and Conquer the Market!

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What characterizes the short run in production?

All factors of production are variable

At least one factor of production is fixed

The short run in production is characterized by the presence of at least one fixed factor of production. This means that while some factors can be adjusted to increase output—like labor hours or raw materials—others, such as capital equipment or factory size, remain unchanged in that time frame. This limitation influences how firms respond to changes in demand and affects their capacity to scale production efficiently.

In contrast, the notion that all factors of production are variable pertains to the long run, where firms have the flexibility to change both fixed and variable factors. Maximum production capacity may not be achievable in the short run due to these fixed factors, and strategies in the short run typically focus on immediate operational improvements rather than long-term planning.

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Production capacity is maximized

The focus is on long-term strategies

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