Big Truck Hauling Company uses 5 units of capital at $1,000 per unit and employs 10 employees at a cost of $400 each. What is the company's fixed cost?

Question

Quizplus · Accepted Answer

The company's fixed cost includes the cost of capital and does not vary with the number of employees. Therefore, the fixed cost for Big Truck Hauling Company is 5 units of capital at $1,000 per unit, which equals $5,000.

Big Truck Hauling Company Uses 5 Units of Capital at $1,000