Sagot :
Fixed costs do not affect the marginal cost of production since they do not typically vary with additional units. Variable costs, however, tend to increase with expanded capacity, adding to marginal cost due to the law of diminishing marginal returns.
What is Fixed costs?
Fixed costs, also known as indirect costs or overhead costs in accounting and economics, are corporate expenses that are independent of the volume of goods or services generated by the business. They are usually recurrent, such as monthly interest or rent. These expenses are frequently capital expenses.
A fixed expense is essentially a 'necessity.' Tuition, accommodation and board, as well as your car payment (if you have one), car insurance premiums (if you have a car), wireless plan, and internet connection, will be your major fixed expenses in college.
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