While shopping, Lucie sees a pair of jeans on sale for $29.99. She is excited because she has purchased this particular brand of jeans several times in the past for $40.00. In this instance, $40.00 is Lucie's fixed cost.

Question

Quizplus · Accepted Answer

The $40.00 is not a fixed cost; it is the previous price she has paid for the jeans. Fixed costs refer to expenses that do not change with the level of production or sales, such as rent or salaries, and are not applicable in the context of a consumer purchasing a product.

While Shopping, Lucie Sees a Pair of Jeans on Sale