In economic models, the long run time frame assumes no fixed factors of production. Firms can enter or leave the marketplace, and the cost (and availability) of land, labor, raw materials, and capital goods can be assumed to vary. In contrast, in the short run time frame, certain factors are assumed to be fixed, because there is not sufficient time for them to change. This is related to the long run average cost curve, an important factor in microeconomic models. Economics (deriving from the Greek words οίκω [okos], house, and νέμω [nemo], rules hence household management) is the social science that studies the allocation of scarce resources to satisfy unlimited wants. ... Classical economics distinguishes between three factors of production which are used in the production of goods: Land or natural resources - naturally-occurring goods such as soil and minerals. ... Firm can have several meanings: Firm - a loose legal term for a company. ... A marketplace is the space, actual or metaphorical, in which a market operates. ... material is the substance or matter from which something is or can be made, or also items needed for doing or creating something. ... In economics, capital goods refer to real products that are used in the production of other products but are not incorporated into the new product (these are termed Consumer Goods). ... The long run average cost (LRAC or LAC) curve illustrates - for a given quantity of production - the average cost per unit which a firm faces in the long run (i. ... Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. ...

In macroeconomic models, the long run assumes full factor mobility between economic sectors, and often assumes full capital mobility between nations. Macroeconomics is the study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices. ... A sector is a part of a whole. ... In politics a capital (also called capital city or political capital — although the latter phrase has an alternative meaning based on an alternative meaning of capital) is the principal city or town associated with its government. ...

The concept of long run cost is used in cost-volume-profit analysis and product mix analysis.

A famous use of the phrase was by John Maynard Keynes, who said in dry humor, "In the long run, we are all dead." John Maynard Keynes John Maynard Keynes, 1st Baron Keynes of Tilton (pronounced Kaynes) (June 5, 1883 – April 21, 1946) was an English economist, whose radical ideas had a major impact on modern economic and political theory as well as Franklin D. Roosevelts New Deal. ...