The sum of the expenses of a firm that is stable and does not change with the quantity of the product that is produced and sold is called:
A)fixed cost.
B)variable cost.
C)total cost.
D)marginal cost.

Question

Quizplus · Accepted Answer

Fixed cost is the sum of the expenses of a firm that does not vary with the quantity of the product that is produced and sold. It includes expenses such as rent, insurance, and salaries, which do not change regardless of the level of production. Variable cost, on the other hand, is the sum of expenses that vary with the quantity produced, such as raw materials and labor. Total cost is the sum of fixed and variable costs, while marginal cost is the cost of producing one additional unit of a product.

The Sum of the Expenses of a Firm That Is