Question

You open a clothing business and have to pay rent even if you do not produce any clothing. Rent is a _____. fixed cost variable cost profit

Answer 1

You open a clothing business and have to pay rent even if you do not produce any clothing. Rent is a fixed cost.

Answer 2

Rent is a fixed cost. Regardless of if you produce any clothing, you are still using that building to make the clothes. Even if you aren't making any clothes, but you are still occupying the building, you will have to pay the rent. The rent is based on the building, not the clothes.