Fixed costs have no effect on a firm's profit.

Name: Fixed costs have no effect on a firm's profit.
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Question

Quizplus · Accepted Answer

Fixed costs are always present and do affect a firm's profit. They are expenses that do not vary with the level of output or sales and must be paid regardless of the level of business activity. Therefore, they must be factored into a firm's pricing strategy and profit calculations.

Fixed Costs Have No Effect on a Firm's Profit