Question: Why are cost behaviors and estimates usually only valid within a certain relevant range? Changes in pricing because cost relationships can change over time Inflation

Why are cost behaviors and estimates usually only valid within a certain relevant range?

Changes in pricing because cost relationships can change over time

  • Inflation can cause the value of money to change over time

Efficiency of scale can cause changes in cost and profits over time

  • Costs will always increase and can change profit margins over time

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