alleryStart learning →Costs can be decomposed into variable costs and:
AImplicit costs
BMarginal costs
CAverage costs
DFixed costs
Answer & Solution
Correct answer: D. Fixed costs
1. A second way of splitting costs asks whether they change with output.
2. We can decompose costs into fixed and variable costs.
3. Fixed costs are the costs of the fixed inputs, such as capital.
4. Variable costs change as the firm produces more or less.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 7 'Production, Costs and Industry Structure', sections 7.1-7.4_
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