ACCT401 Fixed Costs Analysis

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ACCT401

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Fixed costs are often defined as “fixed over the short run.” Does this mean that they are not fixed over the long run? Why or why not? What is the difference between short-run and long-run decisions? Give an example of each. Post must be 380 words or more (not including references).

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Running head: FIXED COSTS

Fixed Costs
Name
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FIXED COSTS

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Fixed Costs

Fixed costs are expenses that do not vary with changes in the levels of output in a firm.
Fixed costs remain the same even when the volume of production in a firm is increasing or
decreasing. Expenses such as rent paid by business entities, for instance, does not depend on the
volume of the output made by the firm. Fixed costs are regarded as fixed over the short run
because the long run has a sufficient period of time for the fixed costs to become var...

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