Fixed costs are
A) a production expense that does not vary with output.
B) a production expense that changes with the quantity of output produced.
C) equal to total cost divided by the units of output produced.
D) the amount by which a firm's cost changes if the firm produces one more unit of output.

Question

Quizplus · Accepted Answer

Fixed costs are expenses that do not vary with the quantity of output produced. These expenses include things like rent, salaries, and insurance. They are constant regardless of how many units of output a firm produces.

Fixed Costs Are