6/28/2017 VariableCost&FixedCostEconomics

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Variable & Fixed Cost

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Accounting Variable Costs and Fixed Costs
Economics
All the costs faced by companies can be broken into two main categories: xed
Economics Articles
costs and variable costs.
Economic Data
Economics Glossary Fixed costs are costs that are independent of output. These remain constant
throughout the relevant range and are usually considered sunk for the relevant
Macroeconomics
range (not relevant to output decisions). Fixed costs often include rent, buildings,
Economic Indicators machinery, etc.
Fiscal Policy
Variable costs are costs that vary with output. Generally variable costs increase at a
Microeconomics
constant rate relative to labor and capital. Variable costs may include wages,
Comparative Advantage
utilities, materials used in production, etc.
The Supply Curve
Price Elasticity In accounting they also often refer to mixed costs. These are simply costs that are
Fixed & Variable Cost
part xed and part variable. An example could be electricity--electricity usage may
increase with production but if nothing is produced a factory still may require a
ATC & Marginal Cost
certain amount of power just to maintain itself.
Marginal Revenue
Output Decision Below is an example of a rm's cost schedule and a graph of the xed and variable
Price Floor
costs. Noticed that the xed cost curve is at and the variable cost curve has a
constant upward slope.
Price Ceiling
Negative Externalities
Positive Externalities
Price Gouging
Sunk Costs
Game Theory
Game Theory Introduction
Nash Equilibrium
Extensive Form
Monopolies
Monopolies
The Sherman Act
The Clayton Act
Papers
Bootstrap Method
The CAPM Model
Euro Creation and Crisis
FX and In ation in Pakistan
Poverty and Crime
General Finance
Mergers / Acquisitions
Money Market
Options
Real Estate
Retirement
Stocks
Other Personal Finance
Opinions / Essays
Excel
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