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Short Run vs. Long Run

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PPGPortal > Home > Concept Dictionary > S > Short Run vs. Long Run
 
Short Run vs. Long Run

The microeconomic distinction between the long run and the short run is that in the short run there is at least one factor of production that is fixed. In the long run, there are no fixed factors of production.

(Benjamin, Dwayne. Class Lecture.  PPG 1002H Microeconomics for Policy Analysis, University of Toronto School of Public Policy and Governance.)

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In the short run, the fixed factor may be a number of machines, land, plant size, labour force etc. There may be more than one fixed factor. In the long run, the level of all of the factors of production can be changed. Put another way, in the long run, there are no fixed factors of production. It is important to recognize that no specific time interval is implied by the distinction between the “long” and “short” run.
     
Short Run vs. Long Run

The microeconomic distinction between the long run and the short run is that in the short run there is at least one factor of production that is fixed. In the long run, there are no fixed factors of production.

(Benjamin, Dwayne. Class Lecture.  PPG 1002H Microeconomics for Policy Analysis, University of Toronto School of Public Policy and Governance.)

---------------------------------

In the short run, the fixed factor may be a number of machines, land, plant size, labour force etc. There may be more than one fixed factor. In the long run, the level of all of the factors of production can be changed. Put another way, in the long run, there are no fixed factors of production. It is important to recognize that no specific time interval is implied by the distinction between the “long” and “short” run.

Approved for glossaryposting by Ben Eisen on December 7, 2010


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