A firm must pay _____ costs even if it produces and sells nothing.
A) variable
B) lumpy
C) direct labor
D) fixed
E) breakeven

Question

Quizplus · Accepted Answer

Fixed costs are those which do not vary with the level of production or sales. These costs are incurred regardless of the amount of output or sales generated by the business. This means that the firm must pay fixed costs even if it does not produce or sell anything. Examples of fixed costs include rent, salaries, insurance, property taxes, and depreciation.

A Firm Must Pay _____ Costs Even If It Produces