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  2. Long run and short run - Wikipedia

    en.wikipedia.org/wiki/Long_run_and_short_run

    In economics, the long-run is a theoretical concept in which all markets are in equilibrium, and all prices and quantities have fully adjusted and are in equilibrium.The long-run contrasts with the short-run, in which there are some constraints and markets are not fully in equilibrium.

  3. Cost curve - Wikipedia

    en.wikipedia.org/wiki/Cost_curve

    The long-run marginal cost curve is shaped by returns to scale, a long-run concept, rather than the law of diminishing marginal returns, which is a short-run concept. The long-run marginal cost curve tends to be flatter than its short-run counterpart due to increased input flexibility.

  4. AD–AS model - Wikipedia

    en.wikipedia.org/wiki/AD–AS_model

    In the short run wages and other resource prices are sticky and slow to adjust to new price levels. This gives way to an upward sloping or, in the extreme case of completely fixed prices, horizontal SRAS. In the long-run, resource prices adjust to the price level bringing the economy back to its structural output level along a vertical LRAS. [10]

  5. Price elasticity of supply - Wikipedia

    en.wikipedia.org/wiki/Price_elasticity_of_supply

    The price elasticity of supply (PES or E s) is commonly known as “a measure used in economics to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its price.” Price elasticity of supply, in application, is the percentage change of the quantity supplied resulting from a 1% change in price.

  6. Monopolistic competition - Wikipedia

    en.wikipedia.org/wiki/Monopolistic_competition

    A firm making profits in the short run will nonetheless only break even in the long run because demand will decrease and average total cost will increase, meaning that in the long run, a monopolistically competitive company will make zero economic profit. This illustrates the amount of influence the company has over the market; because of brand ...

  7. Average cost - Wikipedia

    en.wikipedia.org/wiki/Average_cost

    A long-run average cost curve is typically downward sloping at relatively low levels of output, and upward or downward sloping at relatively high levels of output. Most commonly, the long-run average cost curve is U-shaped, by definition reflecting economies of scale where negatively sloped and diseconomies of scale where positively sloped.

  8. Long-run cost curve - Wikipedia

    en.wikipedia.org/wiki/Long-run_cost_curve

    For example, a firm cannot build an additional factory in the short run, but this restriction does not apply in the long run. Because forecasting introduces complexity, firms typically assume that the long-run costs are based on the technology, information, and prices that the firm faces currently. The long-run cost curve does not try to ...

  9. Profit maximization - Wikipedia

    en.wikipedia.org/wiki/Profit_maximization

    The principal difference between short run and long run profit maximization is that in the long run the quantities of all inputs, including physical capital, are choice variables, while in the short run the amount of capital is predetermined by past investment decisions. In either case, there are inputs of labor and raw materials.