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You run a donut shop. You rent your mix master for $200 per month and the mix master has a daily capacity of 2,834 donuts.

You run a donut shop. You rent your mix master for $200 per month and the mix
master has a daily capacity of 2,834 donuts. Anything over 2,834 donuts per day
will require the rental of another mix master.
In the above example, the $200 figure is best referred to
0 as a variable cost
O as the relevant range of variable costs
( as the relevant range of one mix master
() as a fixed cost

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