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Question
___________ is a fixed cost.
___________ is a fixed cost.
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Solution
The correct option is B Factor rent
Factors such as land and machinery which often require huge investments and are often purchased for the long term. Thus the rent paid on these factors are fixed costs as they are not directly related to the production process and they have to be paid irrespective of the level of output produced.
Factors such as land and machinery which often require huge investments and are often purchased for the long term. Thus the rent paid on these factors are fixed costs as they are not directly related to the production process and they have to be paid irrespective of the level of output produced.
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