FIXED COST: In general, cost that does not change with changes in the quantity of output produced. More specifically, fixed cost is combined with the adjectives "total" and "average" to indicate the overall level of fixed cost or the per unit fixed cost. Fixed cost is incurred whether of not any output is produced. The same fixed cost is incurred at any and all output levels. This means that total fixed cost is, in fact, FIXED. However, it also means that average fixed cost, or fixed cost per unit, declines as the output level increases. Spreading out $100 over 1,000 units gives a lower per unit fixed cost that spreading out $100 over 10 units.

     See also | opportunity cost | total cost | total fixed cost | average fixed cost | variable cost | fixed input | variable input | short-run production |

FIXED COST, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 26, 2024].

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A usually secret agreement among competing firms in an industry (primarily oligopoly) to dominate the market, control the market price, and otherwise act like a monopoly. The reason for the secrecy is that such behavior is illegal in the United States under antitrust laws. Collusion can take one of two forms. Explicit collusion occurs when two or more firms in the same industry formally agree to control the market. Implicit collusion occurs when two or more firms in the same industry control the market through informal, interdependent actions. Collusion is one of two ways oligopoly firms cooperate to avoid competition. The other is through mergers.

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