Long Run
Definition
The time horizon over which all inputs, including capital, can adjust. In macro, long-run output equals potential GDP.
Example
Switching to a different industry is a long-run decision; staffing the next shift is short-run.
The time horizon over which all inputs, including capital, can adjust. In macro, long-run output equals potential GDP.
Switching to a different industry is a long-run decision; staffing the next shift is short-run.