Long Run

Long Run

A period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs, whereas in the short run firms are only able to influence prices through adjustments made to production levels. Additionally, whereas firms may be a monopoly in the short-term they may expect competition in the long-term.

In economics, long-run models may shift away from short-turn equilibriums, in which supply and demand react to price levels with more flexibility.

Firms examining the long run understand that they cannot alter levels of production in order to reach an equilibrium between supply and demand. In the long run, they can either expand or reduce production capacity or enter or exit an industry based on expected profits. In the short run, barriers to entry prevent competitors from quickly entering a market. In the long run, however, competitors may enter or exit an industry depending on the levels of profit previously seen by companies operating in that industry.

Investment dictionary. . 2012.

Look at other dictionaries:

  • long-run — UK US adjective [before noun] ► continuing to exist or have an effect for a long period of time: long run growth/inflation/potential »Spending on public services helps long run economic growth. »Consumer confidence is well above its long run… …   Financial and business terms

  • long run — (n.) also long run, ultimate outcome, 1620s, from LONG (Cf. long) (adj.) + RUN (Cf. run) (n.), on notion of when events have run their course. As an adjective from 1804 …   Etymology dictionary

  • long-run — adj. 1. relating to or extending over a relatively long time; as, the long run significance of the elections. Syn: long term. [WordNet 1.5] …   The Collaborative International Dictionary of English

  • long-run — [lôŋ′run′] adj. extending over a long time …   English World dictionary

  • 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 …   Wikipedia

  • long run — A period of time in which all costs are variable; longer than one year. Bloomberg Financial Dictionary * * * long run UK US noun [S] (also long term) ► a long period of time: »We are optimistic about the long term. a long run of sth »There are… …   Financial and business terms

  • long-run — /lawng run , long /, adj. happening or presented over a long period of time or having a long course of performances: a long run hit play. [1900 05] * * * …   Universalium

  • long run — n. long range outlook in, over the long run * * * [ lɒŋrʌn] over the long run [ long range outlook ] in …   Combinatory dictionary

  • long run — noun a period of time sufficient for factors to work themselves out in the long run we will win in the long run we will all be dead he performed well over the long haul • Syn: ↑long haul • Hypernyms: ↑time period, ↑perio …   Useful english dictionary

  • long run — noun Date: 1627 a relatively long period of time usually used in the phrase in the long run • long run adjective …   New Collegiate Dictionary

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