Access for free at openstax.org
7.4 • Production in the Long Run 173

In the long run, all factors (including capital) are variable, so our production function is

.

Consider a secretarial firm that does typing for hire using typists for labor and personal computers for capital.

To start, the firm has just enough business for one typist and one PC to keep busy for a day. Say that’s five

documents. Now suppose the firm receives a rush order from a good customer for 10 documents tomorrow.

Ideally, the firm would like to use two typists and two PCs to produce twice their normal output of five

documents. However, in the short turn, the firm has fixed capital, i.e. only one PC. The table below shows the

situation:

# Typists (L)

1 2 3 4 5 6

Letters/hr (TP) 5 7 8 8 8 8 For K = 1PC

MP

5 2 1 0 0 0

TABLE 7.11 Short Run Production Function for

Typing

In the short run, the only variable factor is labor so the only way the firm can produce more output is by hiring
{"file_size_mb": 26.99, "title": "Principles of Microeconomics 3e", "producer": "Prince 14.2 (www.princexml.com)", "total_pages": 597, "moddate": "2022-12-07T14:23:05-06:00", "creator": "PDFMiner", "file_type": ".pdf", "uploaded_via": "batch_uploader", "creationdate": "2022-12-07T14:15:44-06:00", "file_name": "Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "batch_upload": true, "upload_timestamp": "2026-02-07T15:37:44.339247", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf"}