ECONOMICS

Detailed explanation-1: -Wages are variable costs in a firm, as the number of employees required will vary based on the demand for production, therefore the wages paid to the total number of employees will vary with the number of employees.

Detailed explanation-2: -Wages paid to the factory labour are costs that are directly proportional to the level of production. If zero output is being produced then these costs do not have to be incurred. These costs vary with the level of output produced. Therefore, they are classified as variable costs.

Detailed explanation-3: -A key principle guiding the concept of the short run and the long run is that in the short run, firms face both variable and fixed costs, which means that output, wages, and prices do not have full freedom to reach a new equilibrium.

Detailed explanation-4: -Labour is the factor of production is most likely to be variable in the short run.

Detailed explanation-5: -Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.