ECONOMICS

Detailed explanation-1: -Fixed costs do not vary with the production level. Total fixed costs remain the same, within the relevant range. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units.

Detailed explanation-2: -Answer and Explanation: Fixed costs remain constant regardless of the level of output because they are operating expenses for a firm but they are not dependent on the activity of the firm. In addition, fixed expenses do not change so often. For example, monthly rent paid by the business.

Detailed explanation-3: -While the total amount of fixed cost changes with the level of production, fixed cost per unit remains constant as volume changes.

Detailed explanation-4: -Fixed cost is independent of the units of output. It remains constant. Q. A firm has a total variable cost of Rs1, 000 at 5 units of output.

Detailed explanation-5: -Fixed cost remains constant as output increases. Thus, average fixed cost decreases as the level of output increases. Total cost shows the cost of variable inputs in the production process which contains information about factor prices and technology by nature.