Question

During autumn​ months, passenger railroads across the globe deal with a condition called slippery rail. It results from a combination of​ water, leaf​ oil, and pressure from the​ train's weight, which creates a slippery black ooze that prevents trains from gaining traction. One solution for slippery rail is to cut back trees from all of a rail​ firm's rail network on a regular​ basis, thereby helping prevent the problem from developing. If​ incurred, would this railroad expense be a better example of a fixed cost or a variable​ cost? Why? A. This is an example of a fixed cost because the cost​ doesn't vary with the number of trains. B. This is an example of a variable cost because it is a​ long-run cost. C. The cost can be either fixed or variable depending on whether we are talking about the short run or long run.

Answer 1

A) This is an example of a fixed cost because the cost​ doesn't vary with the number of trains.

Step-by-step explanation:

A fixed cost is a cost that does not vary as the total output varies. In this case, the number of trains using the tracks would be the total output, and the tracks need to bee cleaned regardless of how many trains will use them. Since the costs do not vary depending on the number of trains that will use the tracks, it is considered a fixed cost.