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Gary Takes His Car to the Auto Shop for Routine

question 43

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Gary takes his car to the auto shop for routine maintenance every 3,000 miles. He is trying to avoid a major repair bill in the future. His behavior demonstrates


Definitions:

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Fixed Costs

Fixed costs are business expenses that do not change with the level of output or sales, such as rent or salaries.

Variable Costs

Costs that vary directly with the level of production or service activity within a business.

Net Income

The total amount of profit left over after all operating expenses, taxes, and interest have been deducted from total revenue.

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