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| Please do not remove or deface this notice or blank, merge, or move this article while the discussion is in progress. However, you are welcome to edit this article and improve it. For more information, read the ].</div >] | Please do not remove or deface this notice or blank, merge, or move this article while the discussion is in progress. However, you are welcome to edit this article and improve it. For more information, read the ].</div >] | ||
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| In ] models, the '''long run''' time frame assumes no fixed ]. ]s can enter or leave the ], and the cost (and availability) of land, ], ], and ] 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 ] 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 land, ], ], and ] 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 ] curve, an important factor in ] models. | ||
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| A famous use of the phrase was by ], who said in dry humor, "In the long run, we are all dead." | A famous use of the phrase was by ], who said in dry humor, "In the long run, we are all dead." | ||
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Revision as of 03:43, 16 April 2005
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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 curve, an important factor in microeconomic models.
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."
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