Timeline economicsTime element plays an important role in price determination of a firm. During short period two types of factors are employed. One is fixed factor while others are variable factors of production. Fixed factor of production remains constant while with the increase in production, we can change variable inputs only because time is short in which all the factors cannot be varied. Raw material, semi-finished material, unskilled labour, energy, etc., are variable inputs which can be changed during short run. Machines, capital, infrastructure, salaries of managers and technical experts are included in fixed inputs. During short period an individual firm can change variable factors of production according to requirements of production while fixed factors of production cannot be changed.

1. © 365careers, 2015
1
Timeline
Equity
Contribution
1 June 2015
$3,000
Acquisition of
Lemonade Stand
10 June 2015
$1,000
Purchase Raw
Materials
12 June 2015
$500

2. © 365careers, 2015
2
Timeline
Equity
Contribution
1 June 2015
$3,000
Acquisition of
Lemonade Stand
10 June 2015
$1,000
Purchase Raw
Materials
12 June 2015
$500
Revenues
26 June 2015
Revenue $1,200
(Cogs $500)
Utility Expenses
26 June 2015
$150
Start of Trading

3. © 365careers, 2015
3
Timeline
Revenues
20 August 2015
Revenue $2,700
(Cogs $900)
Utility Expenses
20 August 2015
$200
Depreciation
$100
Purchase Raw
Materials
15 July 2015
$900