Fixed Costs Are

question 104

Multiple Choice

Fixed costs are

• A) costs that never change.
• B) costs that a firm incurs even when output is zero.
• C) not actually costs since they do not affect the decisions of a firm.
• D) costs that increase at a constant rate when output increases.

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Definitions:

Competitive Price-Taker Model

A market situation where individual firms have no control over the price of a product, typically because of perfect competition.

Competition

The rivalry among businesses to attract customers, striving to achieve such goals as higher sales, market share, and innovation.

Price

The amount of money required to purchase a good or service.

Firms

Business organizations or entities engaged in commercial, industrial, or professional activities, aiming to generate profits.