Supply - Part 2

In order to supply a product, a combination of land, labor, capital, and entreprenurs must come together. This combination between the factors of production and the output of goods and services is addressed by the theory of production.

The theory of production is usually divided into periods known as the short run and long run. In the short run, it is assumed that this period allows only the change in the variable known as labor, while the long run allows producers to change quantities of all of their resources (building new factories, producing new product lines, large-scale retraining, etc.). Read more