Firms that have high ﬁxed costs need to increase sales in order to reduce their cost per unit sold.

Name: Firms that have high ﬁxed costs need to increase sales in order to reduce their cost per unit sold.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true because firms with high fixed costs have high costs that do not change with changes in production levels. As a result, the only way to spread these costs over a greater number of units and reduce the cost per unit sold is to increase sales.

Firms That Have High ﬁXed Costs Need to Increase Sales