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From course:

Management accounting 2022

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Question:

What is the difference between short run and long run pricing decisions?

Author: Hjalmer Pedersen



Answer:

Short run decisions have a time horizon less than 1 year. Fixed costs are mostly irrelevant in short run decisions because you cannot change fixed costs in the short run. Long run decisions have a time horizon of more than 1 year. Fixed costs are taken into consideration because these can be changed in the long run.


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