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# Variable factor

Variable factor
Definition: A variable factor is a factor of production whose quantity can be varied in the short run. We would normally expect labour and raw materials to be variable factors.
Related glossary term: ...

Variable factor - An input that can be varied by any desired amount in the short run.

VARIABLE FACTOR OF PRODUCTION: An input whose quantity can be changed in the time period under consideration. This usually goes by the shorter term fixed input and should be immediately compared and contrasted with fixed factor of production, which goes by the shorter term fixed input.

2.00
Since the incremental cost per unit is less that the price offered in the special order, the company should accept it. Accepting special order will generate additional contribution of \$2.00 unit and \$4,000 in total.

(That is, first the marginal returns to successive small increases in the variable factor of production turn down, and then eventually the overall average returns per unit of the variable input start decreasing.) Since the law assumes that the available quantity of at least one factor of production ...