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

Oligopoly

Electric bill

Fabric costs

Rent on factory

Answer 1

The cost that represents a fixed cost for a clothing factory in this scenario is the Rent on factory.

Fixed costs are expenses that do not change with the level of production, meaning they remain constant regardless of how much or how little is produced. Rent on the factory typically falls into this category, while costs like labor, electric bills, and fabric costs can vary based on the production level.