long run

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A period sufficiently long that all variables can be changed. Some variables that appear fixed in the short run can be changed in the long run. In the long run, for example, a firm can build new premises, carry out research and development programmes to devise new processes and products and apply them, as well as recruit and train managers and skilled workers. In the short run most of these things are impossible: the firm can only buy more fuel and materials, and recruit additional untrained workers. Long-run supply and demand curves are typically more elastic than the corresponding short-run curves.

Subjects: Economics.

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