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Why not total fixed costs vary with the level of output?

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Why not total fixed costs vary with the level of output?
posted Feb 12 by anonymous

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1 Answer

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That's why it is fixed, which means irrespective of output of the process/company the cost is same.
Lets understand with a small example -
Say you have a small plant for which you spend money on building and machinery. Irrespective of plant produce nothing or massive production this cost will remain same. Cost which varies with production is the cost of raw material, cost of electricity or fuel etc etc...

Hope this clarifies...

answer Feb 13 by Salil Agrawal
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