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The short run is a period of time in which only one production function or input (say labor) is allowed to vary while other inputs of production; land and capital are held fixed.

In the short run, therefore, production can be increased with one variable factor and other factors remaining constant. In the short run, the law of variable proportion governs the production behavior of a firm.

The law of variable proportion shows the direction and rate of change in the output of firm when the amount of only one factor of production is varied while other factors of production are held constant.

The law of variable proportion passes mainly through two phases:

(i) Increasing returns.

(ii) Diminishing returns.

Relationship between Production Inputs and Outputs:

Production function establishes a physical relationship between output and inputs. It describes what is technical feasible when the firm uses each combination of input. The firm can obtain a given level of output by using more labor and less capital or more capital and less labor. Production function describes the maximum output feasible for a given set of inputs in technical efficient manner.

Production Function takes Quantities of Inputs:

It is imperative to note that production function does not take into account the prices of input or of the output. It simply takes into account the quantities of inputs which are employed to produce certain quantities of output.