Relationship Between Costs
It is important to understand that certain costs vary as output grows.
The difference is a key example of how fixed, variable, and total costs relate to each other.
Fixed costs do not differ with the quantity of output. Variable costs fluctuate as long as output fluctuates. It is important to note that fixed costs are unchanged regardless of whether the plant makes 10 or 5,000 pieces of candy. Variable costs, however, increase and decrease as output fluctuates. Total costs indicate like designs with the main exclusion that total costs are also more than zero, regardless of the output.
