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all of the following would be considered fixed costs for a producer except which one? question 102 options: raw materials rent insurance property taxes

User Rick Eyre
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Final answer:

Raw materials are not considered a fixed cost for a producer because their cost varies with the level of production, unlike fixed costs such as rent, insurance, and property taxes which remain constant regardless of production levels.

Step-by-step explanation:

The question relates to distinguishing between fixed and variable costs for a producer. Of the options provided (raw materials, rent, insurance, and property taxes), all are considered fixed costs except for raw materials. This is because fixed costs are not affected by the level of production; they are expenses that remain constant regardless of how many goods are produced. Rent, insurance, and property taxes are typical fixed costs. Rent is fixed under a lease agreement, insurance premiums are typically constant over the policy term, and property taxes are set by local governments and don't fluctuate with production levels. In contrast, the cost of raw materials varies with the amount of production; the more you produce, the more raw materials you need, and therefore, this is a variable cost.

User Bioz Nguyen
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