Fixed costs exist only in:
A)The long run.
B)Capital intensive markets.
C)The short run.
D)Labor intensive markets.

Question

Quizplus · Accepted Answer

Fixed costs exist only in the short run. These costs are expenses that do not vary with changes in the level of output or sales. They include rent, insurance, salaries of permanent staff, and other overhead expenses. In the long run, all costs become variable as firms can adjust their production levels and change the size of their operations. Capital and labor intensity do not determine the presence or absence of fixed costs.

Fixed Costs Exist Only In