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How frequently does fixed cost increase?

How frequently does fixed cost increase?

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Answer #1

Fixed costs are mainly in the form of capital goods such as plant and machinery, factories, offices etc which are one time large investments made over the life of the project. The quantity of assets that contribute to fixed costs cannot be frequently changed such as a year and therefore the fixed cost does not increase frequently. Also fixed cost do not change with the amount of output which makes the increase in fixed cost less often and may happen once in 3-5 years when the plant wants to scale up the production or a major maintenance work is carried out.

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