Companies can reduce or eliminate committed fixed costs when demand falls during an economic downturn.

Name: Companies can reduce or eliminate committed fixed costs when demand falls during an economic downturn.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Committed fixed costs, such as salaries or long-term contracts, cannot be easily reduced or eliminated in the short-term, even during an economic downturn. However, companies may be able to reduce variable costs or discretionary expenses to manage their cash flow during tough times.

Companies Can Reduce or Eliminate Committed Fixed Costs When Demand