Question

Costs that do not vary according to production volume are called _____.

a. total costs
b. marginal costs
c. switching costs
d. variable costs
e. fixed costs

Answer 1

Costs that do not vary according to production volume are called fixed costs. Fixed costs remain the same regardless of the level of production.

Step-by-step explanation:

Costs that do not vary according to production volume are called fixed costs. Fixed costs are the costs of the fixed inputs, such as rent, machinery, equipment, and advertising. Regardless of the level of production, fixed costs remain the same. For example, the rent on a factory or a retail space is a fixed cost that doesn't change with production volume.