Question

Assume baseball player salaries are fully determined before the season starts. From the point of view of the baseball team owner, player salaries during the course of the season are then:______

A. variable costs.
B. marginal costs.
C. average costs.
D. fixed costs.

Answer 1

The correct answer is option D.

Step-by-step explanation:

Fixed costs incurred in the production process can be defined as the cost that does not change with the volume of output. It remains constant throughout the production process.

In the given example, the salaries of baseball players are fixed and will remain the same throughout the season. So, in the view of the team owner, it is a fixed cost as it remains constant.