Total fixed costs are the costs that do not vary with the output. They remain constant regardless of the level of production or sales. For example, rent, salaries, and insurance premiums are all fixed costs that a business must pay regardless of how many units of products they produce or how many sales they make.

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Total Fixed Costs

Question 54

Multiple Choice

Total fixed costs:

A) vary as output varies.
B) are zero when the output is zero.
C) are the costs that do not vary with the output.
D) are the costs that increase with output.

Correct Answer: