What is an example of a fixed input?

A fixed input refers to resources that cannot be easily changed in the short term and remain constant regardless of the level of output. Machinery is a prime example of a fixed input because it typically involves significant investment and is used for a longer timeframe in the production process. When a firm commits to machinery, it cannot quickly adjust this resource based on demand fluctuations.

In contrast, raw materials are variable inputs as they can be adjusted depending on production needs. Labor hours can often be modified as well, making labor a variable input. The quantity of product to be sold is a decision variable that firms can adjust based on market conditions, rather than an input into the production process. Therefore, machinery represents a fixed input due to its essential role in production that remains unchanged in the short term.