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Variable costs are expenditures that vary with the volume of production or service delivery, including medical supplies or utilities that escalate as the number of patients treated rises. Conversely, fixed costs remain invariant irrespective of output levels, such as salaries for permanent personnel or rent for healthcare establishments (Folland, Goodman, & Stano, 2017). In the short term, certain costs remain fixed, as companies may be unable to rapidly modify specific expenditures. A hospital may incur fixed costs associated with building maintenance and long-term equipment leases that remain constant regardless of short-term patient volume fluctuations. In the long term, all costs become variable as firms have sufficient time to completely adjust their operations. A healthcare facility may opt to enlarge its premises or invest in supplementary equipment, thereby modifying its cost structure to accommodate fluctuations in demand (Folland et al., 2017).