Asked by Iliana Napoles on Jun 04, 2024
Verified
Committed fixed costs remain largely unchanged in the short run.
Committed Fixed Costs
Long-term fixed costs that cannot be easily altered in the short term, such as leases, depreciation on equipment, and salaries of permanent employees.
Short Run
A period in which at least one factor of production is fixed, allowing limited adjustments to production or operational levels.
- Identify the characteristics and examples of committed fixed costs.
Verified Answer
AS
Amanda StoutJun 10, 2024
Final Answer :
True
Explanation :
Committed fixed costs are those costs that cannot be easily changed or eliminated in the short run, such as rent, property taxes, and salaries of permanent employees. These costs remain largely unchanged in the short run, regardless of fluctuations in production volume or sales.
Learning Objectives
- Identify the characteristics and examples of committed fixed costs.
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