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.

FIGURE 7.4 Production in the short run may be explored through the example of lumberjacks using a two-person

saw. (Credit: “DO - Apple Day Civilian Conservation Corps Demonstration Crosscut Saw (Gladden)” by Virginia State

Parks/Flickr, CC BY 2.0)

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

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). We can express this

production function numerically as Table 7.2 below shows.

# Lumberjacks 1

2

3

4

5

# Trees (TP)

4 10 12 13 13

MP

4

6

2

1

0

TABLE 7.2 Short Run Production

Function for Trees
164 7 • Production, Costs, and Industry Structure
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