Answer:
A fixed cost is one that does not change in total within a reasonable range of activity. For example, the rent for a production facility is a fixed cost if the rent will not change when there are reasonable changes in the amount of output or input. If there is a need to double the output the rent will change when the company occupies additional work space.
| Previous Question | Next Question |
| Define independent variable? | What happend when a fixed cost remains constant in total? |