Fixed Costs vs Variable Costs

In Chapter 14 we turn out attention to decisions being made by businesses. These choices should revolve around maximizing profit. One main aspect of profit is the concept ofTotal Cost of Production.

We divideTotal Costs into two categoriesFixed Costs andVariable Costs. Think of any company you want.

• What company are you referencing costs for? If it's not a commonly known company, what do they produce?
• Give two examples ofFixed Costs for this company.
• Give two examples ofVariable Costsfor this company.