Which expenses are fixed costs?

Question

Fixed costs are:

Answer choices

1. Raw materials, electricity, rent, and loan interest.
2. Management and security salaries, loan interest, and equipment depreciation.
3. Production-worker and security wages, raw materials, and equipment purchases.

Explanation

In the standard short-run model, fixed costs do not change directly with output. Examples include administrative salaries, security costs, contractual loan interest, and depreciation.

Options 1 and 3 include raw materials, whose use depends on production volume. The complete matching list in this exercise is therefore option 2.