Question

______ are those cost which do not change with change in output.

• A. Variable cost
• B. Fixed cost
• C. Semi-variable cost
• D. Semi-fixed cost

Answer 1

The correct option is B Fixed cost

Fixed costs are indirect costs and have to be paid irrespective of the level of production. Even if zero output is being produced these costs have to be incurred. These costs include rent of the factory, interest payments on borrowed financial capital, payment on the lease for factory equipment.