Question

difference between fixed factor and variable factor. 4 points min.

Answer 1

fixed factor= Fixed factors are those that do not change as output is increased or decreased, and typically include premises such as its offices and factories, and capital equipment such as machinery and computer systems.

variable factor= Variable factors are those that do change with output, which means more are employed when production increases, and less factors include labour, energy, and raw materials directly used in production.

Answer 2

• Fixed factors of production are those factors which cannot be changed when the output is increased or decreased.  
• These factors are already incurred by the organisation and thus cannot be changed during the short run.  
• This includes the office building, the equipment and the machinery which is used in the production purpose.
• Variable factors of production are those production which can be changed with the change in the level of output.
• These includes raw materials, physical labour power and fuel.
• One can increase the variable factors or decrease it according to the production cycle.  
• Production is the result of all the factors of production working together.