does not change
changes
increases
None of these
Answer is Right!
Answer is Wrong!
The correct answer is: A. does not change.
Fixed costs are costs that do not change in the short run, regardless of the level of output. This is because they are incurred regardless of whether or not the firm produces anything. For example, rent, insurance, and property taxes are all fixed costs.
Variable costs, on the other hand, do change in the short run, in proportion to the level of output. This is because they are incurred in order to produce goods or services. For example, the cost of raw materials, labor, and energy are all variable costs.
In conclusion, fixed costs do not change in the same proportion in which output changes.