Question

One of the benefits of dropping a product line is that a company can eliminate the product line's ________ fixed costs.

Answer 1

Dropping a product line allows a company to eliminate the fixed costs associated with it such as rent, equipment costs, research and development, and advertising expenses.

Step-by-step explanation:

One of the benefits of dropping a product line is that a company can eliminate the product line's fixed costs. Fixed costs are expenditures that do not change regardless of the level of production.

Whether you produce a great deal or a little, the fixed costs are the same. These costs include expenses such as rent on a factory or retail space, machinery or equipment costs, research and development costs, and advertising expenses.