Companies can recover fixed capacity costs when demand falls during an economic downturn.

Name: Companies can recover fixed capacity costs when demand falls during an economic downturn.
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Question

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Fixed capacity costs are expenses that are incurred regardless of whether or not a company is producing or selling anything. These costs cannot be immediately reduced when demand falls during an economic downturn, as they are fixed. Therefore, companies typically struggle to recover these costs during a downturn.

Companies Can Recover Fixed Capacity Costs When Demand Falls During