Fixed costs are costs that vary according to the number of units of product made or service sold. For instance, in the pharmaceutical market this would include plastic bottles to place the pills into.

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Fixed costs are costs that do not vary with the number of units produced or sold. Examples include rent, salaries, and insurance. Costs that vary with production volume, like the cost of plastic bottles for pills, are variable costs.

Fixed Costs Are Costs That Vary According to the Number