For most goods, production will involve
A) both fixed costs and variable costs
B) only fixed costs
C) only variable costs

Question

Quizplus · Accepted Answer

Production of most goods involves both fixed costs (costs that do not vary with the level of output) and variable costs (costs that do vary with the level of output). Examples of fixed costs include rent, salaries of permanent employees, and depreciation of equipment, while variable costs include raw materials, labor costs that vary with the level of production, and logistics expenses.

For Most Goods, Production Will Involve