Explain how fixed cost differ from a variable cost. Usespecific examples to solidify your point of view.
Expert Answer
A fixed cost does not depend on thenumber of units produced or sold. It remains constant for anyamount of unit produced/ sold in a particular period of time. Forexample, a store must pay the rent for space irrespective of thesales volume of a month. The monthly rent remains the same evenwhen there are no sales for a month. Therefore, rent is a fixedcost. On the contrary, a variable cost is incurred on a per unitbasis. For each unit produced or
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