I found out what the issue was with the help from eBay's live chat representative. Even though I accepted Paypal, I never linked it to my eBay account and I didn't know how to do it. Once I did this, I was able to do the fixed price listings. Just incase anyone else needs to do this, here are the steps:
1. Log in on your eBay account.
2. Please click on "My eBay" link at the upper right hand portion of the page.
3. Inside "My eBay", please click on "Addresses" link under "My Account" header.
4. Click on "View All Shipping Addresses" link.
5. Under "About Addresses", please click on "Remove" link beside your PayPal email address.
6. Then,
ink your PayPal email address to your eBay account.
Thanks dleckington and member_8880 for your feedback.