Why might firms in industries with high fixed costs be inclined to prevent strikes or prevent strikes quickly?

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2026-02-22 01:10

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Firms in industries with high fixed costs are typically motivated to prevent or resolve strikes quickly because prolonged disruptions can significantly impact their profitability and operational efficiency. High fixed costs mean that a large portion of expenses must be paid regardless of production levels, leading to greater financial strain during work stoppages. Additionally, these firms often rely on maintaining steady output and supply chains, making any interruption detrimental to their competitive position in the market. Thus, swift resolution of labor disputes helps ensure operational continuity and financial stability.

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