Fixed costs are defined as
A)the total costs of a firm's production
B)the additional cost of the last unit produced
C)costs that increase proportionately as the quantity produced increases
D)costs that do not vary as quantity produced increases
E)implicit costs only

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary as the quantity produced increases. These costs are incurred by the firm regardless of how much output is produced. Examples of fixed costs include rent, salaries of permanent employees, and insurance premiums.

Fixed Costs Are Defined as