Question

Which of the following is an example of a fixed expense?

A. Clothing
B. Rent
C. Entertainment
D. Food

Answer 1

The fixed expense here would be B.) Rent.

The price does not change while the cost for food, Entertainment, and Clothing can inflate or deflate at any given time.

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Answer 2

Rent is an example of fixed cost because it remains the same and does not change over the short-term, regardless of an increase or decrease in the number of goods or services sold or produced. All other options are example of variable costs, because they are not constant and change over time.

Correct answer: B