Question

give example of some fixed and variable costs you have experinced or seen in your own personal life or around you

How might these costs change in the "long run" when you can make adjustments to the factors associated with those costs?

inspire me please thanks!

Answer 1

Answer: Fixed costs do not change with changes in level of output,for examlpe..r ent,insurance etc.Fixed costs can not be avoided.

Variable costs are those costs that change with changes in level of outpput. For example, cost of raw material,wages etc.

Now suppose, you started a business and you are paying rent ,insurace expense are your fixed cost for short run. Wages to workers, electricity bill for your business are your variable cost as these cost are not fixed.

Long run is a period in which all factors can be varied.There is only variable costs,no fixed costs in the long run. In the long run,all inputs are variable,because costs that are fixed in the short run can be changed in the long run.Hence all inputs are varible in the long run such as rent,insurance,wages,depreciation etc.