In the very long run, a period where all inputs including factory size are adjustable, a high percentage of a manufacturing firm's total costs become variable costs.

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The 'very long run' is an analytical timeframe in which a firm can adjust inputs that are typically considered fixed even in the long run, such as the size of its factory. This concept extends the long-run framework by allowing for changes to a firm's fundamental capital stock and infrastructure, which are otherwise held constant.

Very Long Run in Economics

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

Cost Composition of Manufacturing Firms in the Very Long Run

In contrast to firms where most costs eventually become variable, certain types of firms are inherently structured to have substantial fixed costs that persist even within the long-run analytical framework.

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