Fixed costs are associated with the capacity to produce goods, not to the actual goods produced.

Name: Fixed costs are associated with the capacity to produce goods, not to the actual goods produced.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Fixed costs, such as rent, utilities, and equipment, are incurred regardless of the actual level of production. They represent the cost of maintaining the capacity to produce goods, rather than the cost of producing each individual unit of output.

Fixed Costs Are Associated with the Capacity to Produce Goods