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Question

Except _________ all are fixed cost.

A
factory insurance
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B
factory depreciation
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C
raw material
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D
factory rent
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Solution

The correct option is C raw material
Option C is correct
These costs only have to be paid when production starts and is directly proportion to the amount of output produced.

Options A, B and D
These have to be paid even if the firm is not producing any output. Thus these are fixed costs.

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