Question

List one example of a fixed cost that might be considered variable over the long run, and describe why it might be considered variable:

Answer 1

Answer :

There are no fixed costs in the long run, because the long run is a sufficient period of time for all short-run fixed inputs to become variable.

One example of a fixed cost that might be considered variable over the long run is the Factory building.

Short Run Cost

In the short run the size of the factory building is a fixed size. It takes a long time to change the factory because you have to buy the land, get planning permission, etc.. Because of this there is a maximum number of machines that can be used.

Long Run Cost

In the long run you can change the factory size if you are producing a quantity beyond the short run production  in that case cost of factory buildng becomes variable cost in the long run. Or you could increase the factory size, which increases your costs.