Difference between revisions of "Variable costs"
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| − | Variable costs are expenses that vary directly with the size of a firm's output. As output increases over the range of production, the variable costs | + | Variable costs are expenses that vary directly with the size of a firm's output. As output increases over the range of production, the variable costs increase. Variable costs include raw materials, labor, fuel, and wear and tear on equipment. Costs, which do not change with the size of a firm's output, are [[fixed costs]]. |
[[category:economics]] | [[category:economics]] | ||
Revision as of 21:15, May 23, 2007
Variable costs are expenses that vary directly with the size of a firm's output. As output increases over the range of production, the variable costs increase. Variable costs include raw materials, labor, fuel, and wear and tear on equipment. Costs, which do not change with the size of a firm's output, are fixed costs.