Q2RQ
Question
What is a fixed cost? Give an example.
Step-by-Step Solution
Verified Answer
Fixed costs are the costs that persistent consistency in total amount.
1Meaning of Fixed cost
The cost that is not function of any other variable is called fixed costs, therefore this cost show persistent consistency even after change in volume of production.
2Examples of Fixed cost
- Minimum electricity bill
- Building or machinery rent
- Salaries to employees
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