ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Your monthly mortgage payment, insurance premiums, and childcare costs are examples of fixed expenses. Fixed expenses can occur weekly, monthly, quarterly, or annually. Variable expenses change from month to month, depending on usage.

Detailed explanation-2: -Examples of Fixed Expenses Insurance premiums, such as for car insurance and homeowners insurance. Property taxes. Internet and cable bills. Childcare expenses.

Detailed explanation-3: -The cost of the insurance premiums for a company’s property insurance is likely to be a fixed cost. The cost of worker compensation insurance is likely to be a variable cost.

Detailed explanation-4: -Fixed costs may include lease and rental payments, insurance, and interest payments.

Detailed explanation-5: -So, the insurance premiums are classified as fixed costs because they do not change with the changes in the output produced by the firms.