Fixed cost V [ Choose ] all costs that are incurred over the life of a product, process, or service expenses that are anticipated and occur at regular intervals Variable cost money already spent based on a past decision depends on the level of output or activity associated with using a resource in one activity instead of another Sunk cost remains constant (unchanged) regardless of the level of output
![Match each cost term to its definition.
Fixed cost
V [Choose ]
all costs that are incurred over the life of a product, process, or service
expenses that are anticipated and occur at regular intervals
Variable cost
money already spent based on a past decision
depends on the level of output or activity
associated with using a resource in one activity instead of another
Sunk cost
remains constant (unchanged) regardless of the level of output
Opportunity cost
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Recurring costs
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Life-cycle costs
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The sum of all costs spent by a firm in achieving a given level of production is known as total cost in economics. It is often represented as the sum of all fixed expenses (e.g., the costs of a building lease and heavy machinery), which do not fluctuate with the amount of product generated, and all variable costs (e.g., the costs of labour and raw materials), which do. Because of diminishing returns on additional units of output, the rate of increase in variable costs with increasing output will be progressively greater in the long term if fixed costs are not changed (for example, by obtaining a larger building or acquiring more heavy gear).In other words, over time, additional inputs with variable costs will give progressively fewer units of output.
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