Answer to Question #247121 in Economics of Enterprise for Anupam singh

Question

Assume that you are an entrepreneur of a hotel. what are the fixed and variable costs to be carried out in the business?

Answer 1

Fixed Cost is the cost which does not differ with the variations in the magnitude of production units while Variable Cost is the cost which differs with the variations in the figure of production units.

Some of the fixed costs that will be voted for by the hotel business include the following: rent, salaries, loan payments, insurance premiums and license fees.

The variable costs that will be carried out by the hotel business on the other hand include the following: water and electricity utilities, car repairs, food, delivery and transport expenses, equipment repairs and sales commissions.