long-run

Examples of long-run in the following topics:

• Short Run and Long Run Costs

  • In economics, "short run" and "long run" are not broadly defined as a rest of time.
  • In the long run there are no fixed factors of production.
  • The long run is a planning and implementation stage for producers.
  • The main difference between long run and short run costs is that there are no fixed factors in the long run; there are both fixed and variable factors in the short run .
  • This graph shows the relationship between long run and short run costs.

• The Slope of the Long-Run Aggregate Supply Curve

  • In the long-run, firms change supply levels in response to expected economic profits or losses.
  • In the long-run, there is exactly one quantity that will be supplied.
  • The long-run aggregate supply curve can be shifted, when the factors of production change in quantity.
  • The equation used to calculate the long-run aggregate supply is: Y = Y*.
  • Assess factors that influence the shape and movement of the long run aggregate supply curve

• Government Activity

  • Government activity and policies have a direct impact on long-run growth.
  • The long-run economic growth is determined by short-run economic decisions.
  • Government activity and policies have a direct impact on long-run growth.
  • Long-run growth can be redirected and improved when changes are made to short-run actions.
  • Government activity impacts long-run growth.

• Moving from Short-Run to Long-Run

  • In the short-run, the price level of the economy is sticky or fixed; in the long-run, the price level for the economy is completely flexible.
  • The long-run supply curve is static and shifts the slowest of all three ranges of the supply curve.
  • The long-run is a planning and implementation stage.
  • The aggregate supply moves from short-run to long-run when enough time passes such that no factors are fixed.
  • Recognize the role of capital in the shape and movement of the short-run and long-run aggregate supply curve

• Long Run Outcome of Monopolistic Competition

  • In the long run, firms in monopolistic competitive markets are highly inefficient and can only break even.
  • In the long-run, a monopolistically competitive market is inefficient.
  • First, that the firms in a monopolistic competitive market will produce a surplus in the long run.
  • In the long run, a firm in a monopolistic competitive market will product the amount of goods where the long run marginal cost (LRMC) curve intersects marginal revenue (MR).
  • Explain the concept of the long run and how it applies to a firms in monopolistic competition

• Introducing Aggregate Supply

  • In the long-run, the aggregate supply is graphed vertically on the supply curve.
  • The equation used to determine the long-run aggregate supply is: Y = Y*.
  • The long-run aggregate supply curve is vertical which reflects economists' beliefs that changes in the aggregate demand only temporarily change the economy's total output.
  • In the long-run, only capital, labor, and technology affect aggregate supply because everything in the economy is assumed to be used optimally.
  • The long-run aggregate supply curve is static because it is the slowest aggregate supply curve.

• Long Run Supply Decisions

  • The long-run supply curve of a market is the sum of a series of short-run supply curves in the market ().
  • Prior to determining how the long-run supply curve looks, its important to understand short-run supply curves.
  • A market's long-run supply curve is the sum of the market's short-run supply curves taken at different points of time.
  • As a result, a long-run supply curve for a market will look very similar to short-run supply curves for a market, but more stretched out; the long-term market curve will a wider "u."
  • Describe the long-run market supply curve of a perfectly competitive market

• Explaining Fluctuations in Output

  • In the short run, output fluctuates with shifts in either aggregate supply or aggregate demand; in the long run, only aggregate supply affects output.
  • For this reason, understanding the fluctuations in economic output is critical for long term growth.
  • There are noticeable differences between short-run and long-run fluctuations in output.
  • In the long-run, the aggregate supply curve and aggregate demand curve are only affected by capital, labor, and technology.
  • In the long-run an increase in money will do nothing for output, but it will increase prices.

• The Short-Run Phillips Curve

  • The short-run Phillips curve depicts the inverse trade-off between inflation and unemployment.
  • The long-run Phillips curve is a vertical line that illustrates that there is no permanent trade-off between inflation and unemployment in the long run.
  • Therefore, the short-run Phillips curve illustrates a real, inverse correlation between inflation and unemployment, but this relationship can only exist in the short run.
  • The idea of a stable trade-off between inflation and unemployment in the long run has been disproved by economic history.
  • Contrast it with the long-run Phillips curve (in red), which shows that over the long term, unemployment rate stays more or less steady regardless of inflation rate.

• Short Run Firm Production Decision

  • When a firm is transitioning from the short run to the long run it will consider the current and future equilibrium for supply and demand.
  • The transition involves analyzing the current state of the market as well as revenue and combining the results with long run market projections.
  • Exiting an industry is a long term decision.
  • The short run supply curve is used to graph a firm's short run economic state .
  • Compare factors that lead to short-run shut downs or long-run exits