| Revision as of 02:54, 13 April 2007 edit70.68.54.150 (talk)No edit summary← Previous edit | Revision as of 10:09, 19 April 2007 edit undoStruway (talk | contribs)4,185 editsm http://icbirmingham.icnetwork.co.uk/birminghampost/sport/tm_headline=blues-getting-their-timing-right%26method=full%26objectid=18927728%26siteid=50002-name_page.htmlNext edit → | ||
| Line 3: | Line 3: | ||
| :''For other uses of the term, see ]'' | :''For other uses of the term, see ]'' | ||
| In ] models, the '''long run''' time frame assumes no fixed ]. ]s can enter or leave the ], and the cost (and availability) of ], ], ], and ] can be assumed to vary. In contrast, in the '']'' time frame, certain factors are assumed to be fixed, because there is not sufficient time for them to change. This is related to the ] (LRAC) curve, an important factor in ] models. | In ] models, the '''long run''' time frame assumes no fixed ]. ]s can enter or leave the ], and the cost (and availability) of ], ], ], and ] can be assumed to vary. In contrast, in the '']'' time frame, certain factors are assumed to be fixed, because there is not sufficient time for them to change. This is related to the ] (LRAC) curve, an important factor in ] models. | ||
| '''Long run marginal cost''' ('''LRMC''') refers to the cost of providing an additional unit of ] or ] under assumption that this requires investment in capacity expansion. LRMC pricing is appropriate for best ], but may lead to a mismatch between operating costs and revenues. | '''Long run marginal cost''' ('''LRMC''') refers to the cost of providing an additional unit of ] or ] under assumption that this requires investment in capacity expansion. LRMC pricing is appropriate for best ], but may lead to a mismatch between operating costs and revenues. | ||
Revision as of 10:09, 19 April 2007
 | It has been suggested that this article be merged with Long-run. (Discuss) Proposed since December 2006. |
- For other uses of the term, see The Long Run
In economic models, the long run time frame assumes no fixed factors of production. Firms can enter or leave the marketplace, and the cost (and availability) of land, labor, raw materials, and capital goods can be assumed to vary. In contrast, in the short-run time frame, certain factors are assumed to be fixed, because there is not sufficient time for them to change. This is related to the long run average cost (LRAC) curve, an important factor in microeconomic models.
Long run marginal cost (LRMC) refers to the cost of providing an additional unit of service or commodity under assumption that this requires investment in capacity expansion. LRMC pricing is appropriate for best resource allocation, but may lead to a mismatch between operating costs and revenues.
In macroeconomic models, the long run assumes full factor mobility between economic sectors, and often assumes full capital mobility between nations.
The concept of long run cost is used in cost-volume-profit analysis and product mix analysis.
A famous use of the phrase was by John Maynard Keynes, who said in dry humor, "In the long run, we are all dead."
See also
 | This economics-related article is a stub. You can help Misplaced Pages by expanding it. |