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FIXED COSTS

Statistics Directorate    
Definition:
Fixed costs are costs that do not vary with the amount produced. Examples are interest on debt, property taxes and rent.

Context:
Economists also add to fixed cost an appropriate return on capital which is sufficient to maintain that capital in its present use. This reflects the idea that all economic costs are opportunity costs, the cost of foregone alternatives. Thus, the return to capital if employed elsewhere constitutes its opportunity cost.

Source Publication:
Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993.

Cross References:
Costs
Variable costs

Hyperlink:
http://www.oecd.org/dataoecd/8/61/2376087.pdf

Statistical Theme: Financial statistics

Created on Thursday, January 03, 2002

Last updated on Sunday, March 17, 2002