What are fixed costs?

Can you explain what fixed costs are?

Sure! Fixed costs are expenses that do not change with the level of goods or services produced by a business.

Can you give me some examples of fixed costs?

Absolutely! Examples include rent, salaries, and insurance. These costs remain constant regardless of production levels.

How do fixed costs affect a business's profitability?

Fixed costs can impact profitability because they must be paid regardless of sales. Higher fixed costs can lead to lower profits if sales are low.

Are fixed costs the same for all businesses?

Not necessarily. Fixed costs can vary widely depending on the industry and the specific business model.