Distinguish between fixed cost and variable costs. Give two examples o – InterviewSolution

InterviewSolution

1.	Distinguish between fixed cost and variable costs. Give two examples of each.
Answer» Fixed costs are costs which remain fixed at all levels of output. On the other hand, variable costs are the costs which vary will the level of output. Examples of fixed costs - salary of permanent staff, rent. Examples of variable costs - wages, costs of purchasing of raw material.

Discussion

No Comment Found

Related InterviewSolutions

The curve in the following diagram is the most similar to a typical , A. Total Variable Cost CurveB. Marginal Cost CurveC. Total Cost CurveD. Average Variable Cost Curve
Which two curves are intersected by MC curve at their minimum points:A. AC and AVCB. AVC and AFCC. AC and AFCD. AC and TVC
When AC curve slopes downwards, what will be the position of MC curve ?
MC curve intersects AC curve at its `"______"` point and AVC curve at its `"_____"` point.A. Maximum, MinimumB. Minimum, MinimumC. Minimum, MaximumD. None of these
Identify the following curve : A. Average Variable Cost CurveB. Total Variable Cost CurveC. Average Fixed Cost CurveD. Average Cost Curve
Which of the following diagram correctly depicts the relationship between `TC, TFC` and TVC ?A. B. C. D.
The area under the following curve is equal to : A. Total CostB. Average CostC. Average Variable CostD. Total Variable Cost
When `AC gt MC`, then MC can:A. FallB. RiseC. Both (a) and (b)D. None of these
Which formula is incorrect to determine the value of TC :A. `TC = TVC + TFC`B. `TC = sumMC`C. `TC = AC xx "Output"`D. `TC = sumMC + TFC`
Discuss the relationship between TVC and MC. OR Draw a diagram showing TVC in terms of the area under MC curve.