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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 (LRAC) curve, an important factor in microeconomic models. A generic firm can make these changes in the long-run In macroeconomic models, the long run assumes full factor mobility between economic sectors, and often assumes full capital mobility between nations. The concept of long run cost is used in cost-volume-profit analysis and product mix analysis.
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