Some costs that are fixed in a short time horizon(e.g.,over the next year)may become variable costs over a longer period of time(e.g.,five years or more).For example,your firm may have a three year employment contract with the general sales manager.Until the current contract expires,the manager's salary may be a fixed cost for the firm, but this expense becomes variable beyond the term of the current contract.This time-dependent definition of fixed costs also applies to many other expenses, including facilities,equipment, and technology.

Please provide an example from your industry of a short-run fixed cost that becomes variable inthe long run.Does this refined definition of fixed costs mean that managers are not subject tothe fixed-cost fallacy when making long-run decisions for their firm?