The term "long-run" refers to a period in economics where all factors of production and costs are variable. In this timeframe, businesses can adjust their resources and production levels fully, allowing for changes in scale and efficiency. This contrasts with the short-run, where some inputs are fixed, limiting a firm's ability to respond to changes in demand or costs. In the long-run, firms can enter or exit markets freely, leading to a more competitive environment. This flexibility helps determine the optimal production levels and pricing strategies, ultimately influencing market equilibrium and the overall economy.