Question

The cookie company in the mall hires only labor to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $300 per day. The daily fixed costs of production are?

Answer 1

The daily fixed costs of production are labor and rent for a total amount of $375.

Explanation:

Fixed costs are costs that doesn't change when quantity increases or decreases. Production costs are the costs a business has to produce a good. According to this, the fixed costs of production include labor to produce cookies and the rent of the space in the mall.