Alex's total cost to mow 10 lawns is $500. If he spends $400 on gas, labor, and other costs that change when quantity changes, what is his fixed cost?

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Quizplus · Accepted Answer

Fixed costs are costs that do not change with the quantity of output produced. In this case, Alex's total cost is $500, and his variable costs (costs that change with quantity, such as gas and labor) are $400. Therefore, his fixed cost is the total cost minus variable costs, which is $500 - $400 = $100.

Alex's Total Cost to Mow 10 Lawns Is $500