Are there fixed costs in the long-run?
Understand the Problem
The question is inquiring about the concept of fixed costs in the context of long-run economic analysis. It seeks to understand whether fixed costs exist once all factors of production can be varied in the long run as opposed to the short run.
Answer
No, there are no fixed costs in the long run.
In the long run, there are no fixed costs.
Answer for screen readers
In the long run, there are no fixed costs.
More Information
In the long run, firms can adjust all their input factors such as labor, capital, and technology, making all costs variable.
Tips
A common mistake is confusing short-run fixed costs with long-run dynamics, where adjustments over time mean that no costs remain fixed.
Sources
- Are There Fixed Costs In The Long Run? - Vaia - vaia.com
- Long Run: Definition, How It Works, and Example - Investopedia - investopedia.com
- Fixed costs in the long run - Economics Stack Exchange - economics.stackexchange.com
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