Economic Definition of short-run production. Defined.
Offline Version: PDF
Term short-run production Definition: An analysis of the production decision made by a firm in the short run, with the ultimate goal of explaining the law of supply and the upward-sloping supply curve. The central feature of this short-run analysis is the law of diminishing marginal returns, which results in the short run when larger amounts of a variable input, like labor, are added to a fixed input, like capital. This analysis of short-run production is but the first step in a brisk walk toward a better understanding of supply. Further steps include the cost of short-run production, especially marginal cost, and the market structure in which a firm operates, such as perfect competition or monopoly.
« short-run equilibrium | short-run production alternatives »
Permalink: https://glossary.econguru.com/economic-term/short-run+production