A fixed cost is independent of output which means that no matter how much you produce the cost will always be the same. An example would be the rent on a factory, the cost will always be the same even if you are making more money.
A variable cost is dependent on output which means that the price is based off of something else. An example would be if you are producing a thousand products instead of a hundred then the supply and labor costs would go up which would be considered variable costs.
2. Discuss a supply factor that could lead to more expensive prices for Taco Villa.
A supply factor that would lead to more expensive prices for Taco Villa would be input costs, if the price of a necessary ingredient to make a taco goes up then the taco will cost more money. Another example would be if minimum wage increases, the labor costs require Taco Villa to increase the price to be making a profit.
Nice job. Very clear and concise. Be careful using phrases like "always be the same" because rents can change, just not with output changes.
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