Long Run vs

The long-run is a theoretical concept in which all markets are in equilibrium, and all prices and quantities have fully adjusted and are in equilibrium.

The long-run contrasts with the short-run as in the long-run there are no fixed factors of production, and there is enough time for adjustment so that there are no constraints preventing changing the output level by changing the capital stock or by entering or leaving an industry.

In microeconomics, there are no fixed factors of production in the long-run, and there is enough time for adjustment so that there are no constraints preventing changing the output level by changing the capital stock or by entering or leaving an industry.

<p>In the short-run, some factors are variable (dependent on the quantity produced) and others are fixed (paid once), constraining entry or exit from an industry.</p> Signup and view all the answers

<p>In macroeconomics, the long-run is the period when the general price level, contractual wage rates, and expectations adjust fully to the state of the economy.</p> Signup and view all the answers