In the long run, the firm has the flexibility to change the quantity of both the inputs i.e. labor and capital. Unlike the short run, where at least one input (typically capital) is fixed, the long run allows firms to adjust both labor and capital. This flexibility is not defined by a specific time frame but by the firm's ability to alter all factors of production. The long run is characterized by complete input flexibility, where firms can change all inputs, including those considered fixed in the short run, such as factory size or major equipment.
Another important aspect, in the long run, is the firm's ability to achieve a desired level of output through various combinations of labor and capital. It allows companies to potentially achieve greater efficiency and cost-effectiveness by adjusting all aspects of their production process to meet their desired output levels. The firm can choose a technique that is more labor-intensive or one that is more capital-intensive.
From Chapter 6:
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