difference between fixed factor and variable factor. 4 points min.
Basis | Fixed factor | Variable factor |
Meaning |
Those factors which remain constant with the change in the output level are called fixed factors of production. These |
Those factors which can be increased or decreased as per the need to increase or reduce the units of output are called variable factors |
Zero level of output |
Fixed factors remains constant even at the zero level of output. |
at zero level of output no (zero) variable factors are employed and as we increase the employment of variable factors, output also increases simultaneously. |
Short run & Long run | These factors are fixed in short run and variable in the long run. | These factors are variable both in the short run as well as in the long run. |
Example | For example Capital such as, building, plant and machinery, etc. are some of the examples of fixed factors of production. | For example- Labour is an example of variable factor of production. |