Which of the following is a cost that represents a fixed cost for a clothing factory whose labor needs fluctuate as production is increased and decreased each week?

Question

Rent on factory

Oligopoly

Fabric costs

Electric bill

Answer 1

The cost that represents a fixed cost for a clothing factory is the rent on the factory. Fixed costs are expenses that do not change with the level of production, meaning they remain constant regardless of how much the factory produces. In contrast, fabric costs and labor costs are variable costs that fluctuate with production levels, and the electric bill may vary based on usage, although it can have fixed components.