Like normally how long can be said as long run? And does specific time length of these words matters?
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The actual length of time does not matter. Simply, in the short-run capital is fixed and labor is variable. In the long-run both capital and labor are variable (which gives firms enough time to, for example, build a new factory to match an increase in demand). It would be really fortunate if there was a general time frame, but that would vary from industry to industry. The long-run for, let say, Ford is a pretty long-time because they are very capital intensive. However the long-run for, lets say, a Clown Rental Service, is very short because it is entirely labor dependent.
Hopefully this answer helps.
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$\begingroup$ Thanks a lot for the explanation! I also just read about a definition saying that normally in a short-term we assume that at least one input is fixed, from the Advanced Microeconomic Theory by Jehle and Reny. $\endgroup$ – Eric Chen Oct 16 '16 at 4:49
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$\begingroup$ Ya, that would be tue slightly more general definition. But the sr case where labor is fixed and capital varies is a rare, odd case $\endgroup$ – bdempe Oct 16 '16 at 5:12
