Question

shannon is opening a new computer repair store and is excited to find a great location. it is important he stays within budget as stated on his business plan so that the price of his services can be calculated accurately and ensure profitability. what type of cost is rent? select one: a. fixed cost b. variable cost c. equilibrium cost d. marginal cost

Explanation:

To determine the type of cost rent is, we analyze each option:

• Fixed cost: Costs that do not change with the level of output or business activity in the short run. Rent for a store location is typically a fixed amount paid regularly, regardless of how many computer repairs are done.
• Variable cost: Changes with the level of output (e.g., cost of repair parts), so rent is not variable.
• Equilibrium cost: Related to market equilibrium (price - quantity balance), not a cost type for a firm's operations like rent.
• Marginal cost: Cost of producing one more unit, which rent is not.

So rent is a fixed cost.

Answer:

a. Fixed cost