doc__table__237

| (159) | To identify passing-on effects, it is important to determine whether the input cost incurred by a purchaser facing an overcharge varies with the input quantity it orders (i.e. variable input cost) or not (i.e. fixed input cost). Indeed, economic theory indicates that the relevant cost category for short run price formation is variable costs or more precisely, marginal cost, i.e. the cost increment incurred when purchasing one additional input (see Box 13 below). The opposite of such costs are fixed costs which, in turn, typically affect the long run strategic decisions of firms, such as market participation, product introduction and level of investment.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-25 · Text as adopted (Official Journal); later amendments are not incorporated in this text.