Long-Run Cost Concepts:

In  the  long  run,  all  factors  of  production  are  variable.   Therefore,  all  costs  are variable.  The long-run average cost curve is a planning curve in the sense that it is a guide to the entrepreneur in his decision to plan the future expansion of his output. In this period, firms can plan to change their capacities or scale, which is prompted by the desire to reduce cost of production.  This period is characterized by a number of possible capacities.