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Economics and the 2008 crisis: a Keynesian view
Economics and the 2008 crisis: a Keynesian view

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Fixed and variable costs

In the short run, some of the firm’s costs are fixed – these are costs that do not change with output. The remaining costs are variable – they change with the level of output.

The following video will help you to work through the difference between fixed and variable costs, and also show how we can apply these concepts to the SRAC curve.

Watch the video and then attempt Activity 22.

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Fixed and variable cost
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