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GCE Economics 1989 Question 15

Question 15

Theory of Costs and Revenue

Which of the following is regarded as fixed cost?

  1. A.Cost of raw materials
  2. B.Cost of fuel
  3. C.Cost of light
  4. D.Rent on land
  5. E.Labour wages.
Show the answer and explanation

Answer: D (Rent on land)

Explanation

Rent must be paid whatever the level of output, so it is a fixed cost.