An example of a firm's fixed cost would be the
A) monthly rent it pays based on a multiple-year lease
B) cost of employing labor
C) quantity of inventory it accumulates
D) raw materials used in production
E) cost of shipping the goods it produces

Question

Quizplus · Accepted Answer

Fixed costs are those that do not change with the level of production or sales. Monthly rent, especially under a multi-year lease, is a fixed cost because it remains constant regardless of the firm's level of output or sales.

An Example of a Firm's Fixed Cost Would Be the