Fixed costs
What Fixed costs means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Fixed costs
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
Read the wording for your board, then hide it and explain Fixed costs in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: Pearson Edexcel
Costs that are spread over a greater number of units when production volume rises, reducing average costs.
Costs such as rent that contribution first goes towards covering before any profit is generated.
Expenses that remain constant regardless of output in the short run, such as rent or salaries.
Costs that are covered by contribution before any further contribution goes towards profit.
Topics that use Fixed costs
- Conditions that prompt trade (Pearson Edexcel A-Level)
- Revenue and costs (Pearson Edexcel A-Level)
- The relationship between revenue and costs (Pearson Edexcel A-Level)
Related terms
- Economies of scale
- Average cost
- Break-even analysis
- Break-even output
- Break-even point
- Business viability
- Capacity utilisation
- Contribution per unit
Using Fixed costs in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics B questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
A week of Premium from your first lesson · Then the free plan continues · No card, no charge