Learn Before
Endogenous Variable
Short-Run vs. Long-Run Analytical Framework
Long Run in Economics
The 'long run' is an analytical timeframe in economics where variables that were held constant (exogenous) in the short run are allowed to become endogenous, meaning they can be adjusted and are determined by the model. The analysis of a long-run equilibrium involves modeling the consequences of these adjustments. This concept does not describe a specific period of time but rather a modeling approach where a firm can adjust all its inputs, including its capital goods.
0
1
Tags
Social Science
Empirical Science
Science
Economy
CORE Econ
The Economy 1.0 @ CORE Econ
Ch.1 The Capitalist Revolution - The Economy 1.0 @ CORE Econ
Economics
Introduction to Microeconomics Course
Related
Long Run in Economics
Short Run in Economics
Long Run in Economics
Learn After
Long-Run Cost Function for Beautiful Cars
Very Long Run in Economics
Firms with High Long-Run Fixed Costs
Long-Run Market Dynamics of Entry, Exit, and Capacity Change
A bicycle manufacturing company experiences a sustained, permanent increase in consumer demand. From an economic modeling perspective, which of the following actions best represents a 'long-run' adjustment by the firm?
Firm Expansion Decision
In economic modeling, the 'long run' refers to a specific timeframe, typically defined as a period of one year or more, during which a firm has sufficient time to alter its use of variable inputs like labor but not its fixed inputs like factory size.
A manufacturing firm is responding to changes in market demand. For each of the following actions the firm might take, classify it as either a 'Short-Run Adjustment' or a 'Long-Run Adjustment' based on economic principles.
Analyzing Business Adjustments Over Time
Impact of Input Flexibility on Firm Behavior
The defining characteristic of the long-run analytical period in economics is that, unlike in the short run, there are no __________ inputs.
A small furniture company experiences a sudden and permanent 50% increase in demand for its products. Arrange the following company actions in the logical order they would likely occur, from the most immediate response to the final adjustment to a new, higher level of production.
A firm in the competitive package delivery industry learns of a new, highly efficient sorting technology that would require building a new, redesigned warehouse. The firm's economists conduct an analysis based on the assumption that they can change any and all aspects of their operation, including the number of warehouses, their fleet of vehicles, and their total workforce. What is the primary implication of adopting this analytical timeframe for their planning?
Market Adjustment Dynamics