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- “In the long run” means thinking about what will happen far into the future, after a lot of time has passed. On the other hand, “in the short run” means thinking about what will happen soon, in the near future, or right away.
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What is the difference between a short-run and a long-run?
What is long run in economics?
What is the difference between short run and long run equilibrium?
How do economists differentiate between a short run and a long run?
What does short run mean?
What is the relationship between short-run average costs and long-run costs?
Dec 11, 2018 · Short run: Quantity of labor is variable but the quantity of capital and production processes are fixed (i.e. taken as a given). Long run: Quantity of labor, the quantity of capital, and production processes are all variable (i.e. changeable).
- Jodi Beggs
Quick definition. Short run – where one factor of production (e.g. capital) is fixed. This is a time period of fewer than four-six months. Very long run – Where all factors of production are variable, and additional factors outside the control of the firm can change, e.g. technology, government policy.
The distinction between the short-run and the long-run is a fundamental concept in microeconomics that describes the time frame over which a firm can adjust its production inputs. The short-run refers to the period in which at least one of the firm's inputs is fixed, while the long-run is the period in which all inputs can be adjusted.
In the study of economics, the long run and the short run don't refer to a specific period of time, such as five years versus three months. Rather, they are conceptual time periods, the primary difference being the flexibility and options decision-makers have in a given scenario.
Moreover, we have seen that, in the short-run, a firm produces that output at which its marginal cost is equal to the price. But, in the long-run, the price must be equal to both the-marginal cost and the average cost.
The main difference between the short-run and long-run is the ability of a firm to adjust its factors of production. In the short-run, at least one factor of production is fixed, such as the firm's capital equipment or facilities.
The short run refers to what happens while some variables (such as prices, wages, or capital stock) are held constant (taken to be exogenous). The long run refers to what happens when these variables are allowed to vary and be determined by the model (they become endogenous).
