Fixed costs: I. are variable over long periods of time.
II) must be paid even if production is halted.
III) are generally affected by the amount of fixed assets owned by a firm.
IV) per unit remain constant over a given range of production output.
A) I and III only
B) II and IV only
C) I, II, and III only
D) I, II, and IV only
E) I, II, III, and IV

Question

Quizplus · Accepted Answer

Fixed costs are variable over long periods of time (I), must be paid even if production is halted (II), and are generally affected by the amount of fixed assets owned by a firm (III). However, fixed costs per unit decrease as production increases, so IV is incorrect.

Fixed Costs: I