Question

Fixed costs are _____.

costs that increase regardless of how much of a good or service is produced

costs that stay the same regardless of how much of a good or service is produced

costs that decrease regardless of how much of a good or service is produced

none of the above

Answer 1

costs that stay the same regardless of how much of a good or service is produced

Step-by-step explanation:

In the short run, fixed costs are the expenses that do not change regardless of the output level. In other words, fixed costs remain a constant amount throughout the financial period. Examples of fixed costs include rent, administrative salaries, insurance, and loan repayments. These amounts will be the same irrespective of production levels.

Fixed costs contrast with variable costs that vary depending on the output level.