In Question 5 Will Investment and Technology act as Fixed Factors or Variable Favtors and also why???
Please give a detailed answer of this question as well
5. FDI not only brings investment in the domestic economy, it also brings new technology. How would the availability of new technology (relating to auto industry) impact the short period production function of a car manufacturer in India?
Dear student,
Investment in technology is a fixed factor.
A short run production function is based on the assumption that the capital or the technology remains constant. With the availability of new technology the entire short run production function would change.
It must be noted that the capital would still be treated as fixed factor.
Investment in technology is a fixed factor.
A short run production function is based on the assumption that the capital or the technology remains constant. With the availability of new technology the entire short run production function would change.
It must be noted that the capital would still be treated as fixed factor.