Discussion
Which of the following activities related to production cannot take place in the short-run ?
Answer: C
An increase in the capacity cannot take place in the short run.
The short run is defined as the period in which at least one factor, usually plant and machinery, is fixed. Output can be changed only by varying the variable factors within the existing plant. Expanding capacity needs a new plant or new machines, which is possible only in the long run, when all factors are variable.
Changing the number of workers, cutting output and routine maintenance of the plant are all things a firm can do with its existing capacity, so they are short-run decisions.
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