Long Run - Long run of a firm can be defined as, a Period...

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Long Run We have assumed that only labor and raw materials are variable factors. All other factors like machines, tools, manager, factory building, etc. are fixed factors. When a firm continues to produce for a sufficiently long number of years some or all of its fixed factors can be replaced. In the long run the distinction between fixed and variable factors becomes less important.
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Unformatted text preview: Long run of a firm can be defined as, a Period sufficiently long during which at least one (or more) of the fixed factors become variable and can be replaced. Long run is an analytical concept. These is no fixed limit on the number of years to distinguish between short run and long run. For each variety of fixed factors, its long run depends upon its life span....
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This note was uploaded on 11/26/2011 for the course ECONOMIC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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