Tuesday, October 28, 2008

Why are fixed costs irrelevant in the short run?

Fixed costs are irrelevant in the short run because they cannot vary. The fixed costs will remain the same regardless of the firm’s output. If a firm bought vats and kettles to brew beer and fail to produce one bottle of it, or produces an ocean of it, the costs of the equipment, the fixed costs, remain the same. 

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QE3 Is Here!

Move over QE2, QE3 is here! The markets are euphoric for now.