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Econ - variable/fixed factor



Variable factors are inputs whose quantities vary when output changes.

Fixed factors are inputs whose quantities do not vary when output changes.

我把重點放在"vary"上 : 如何Vary?




2 Answers

  • 7 years ago
    Favorite Answer

    If a change in output leads to a change in the amount of a factor, it is a variable factor. Else, it is a fixed factor.

    e.g. 1

    Suppose a firm employs 2 units of labour while the output is 10/unit of labour.

    Now, if the output increases to 15/unit of labour but the number of labour drops to 1, then labour is still a variable factor. It is because the rise in output leads to a drop in number of labour. The drop of labour may be explained by the fact that the firm wants to raise capital (or other reasons).

    e.g. 2

    Suppose the rent paid by a firm is $10000 while its output is 100. When the rent rises to $20000 while the output remains 100, rent is regarded as a fixed cost. It is because the output does not change when the rent rises.


    1. change in output ->change in number of factor: variable factor

    2. change in output ->no change in number of factor: fixed factor

    The changes in output and the changes in number of factor are not necessarily in proportional. They can be inversely proportional.

    Source(s): me
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  • 7 years ago

    總之會變的就是variable factor。不理是增是減。

    有時law of diminishing marginal returns真的會有variable factor 增加後output減少的情況 (MP 就會是負數!)

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