Chapter 9 – Introduction

Pure Competition in the Long Run

By the end of this lesson you will be able to:

  • explain how the long run differs from the short run in the purely competitive model
  • describe how profits (or losses) drive the long-run adjustment process of pure competition
  • explain the differences between constant-cost, increasing-cost, and decreasing-cost industries

It is impossible to precisely define the line between the short run and the long run with a stopwatch, or even with a calendar. It varies according to the specific business. Therefore, the distinction between the short run and the long run is more technical: in the short run, firms cannot change the usage of fixed inputs, while in the long run, the firm can adjust all factors of production.

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Agribusiness Management 101 by William Rossman is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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