Question

Salaries and ________ are fixed expenses an entrepreneur will have to consider when scaling. a. utilities b. liabilities c. benefits d. licensing fees

Answer 1

Salaries and benefits are fixed expenses for an entrepreneur. Fixed costs include rent, equipment, R&D, and advertising, and are invariant to production levels.

Step-by-step explanation:

Salaries and benefits are fixed expenses an entrepreneur will have to consider when scaling. As we decompose costs into fixed and variable costs, we understand that fixed expenses are those that do not change regardless of the level of production. For example, once the rent is set on a factory or a retail space, it remains the same until the lease expires. Other types of fixed costs an entrepreneur must consider include the cost of machinery or equipment needed to produce their product, research and development costs to develop new products, and marketing expenses such as advertising to popularize a brand name.