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JAMB Economics 2001 Question 26

Question 26

Theory of Costs and Revenue

Which of the following is an example of a fixed cost?

  1. A.Fuel cost
  2. B.Electricity bill
  3. C.Rent on building
  4. D.Transportation cost
Show the answer and explanation

Answer: C (Rent on building)

Explanation

Rent must be paid whatever the level of output, so it is a fixed cost; fuel, electricity and transport vary with output.