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What is fixed cost and variable cost?
By the Production Function to Cost Curves:
A fixed cost is a cost which does not depend onto the quantity of output generated. This is the cost of the fixed input.
A variable cost is a cost which depends onto the quantity of output generated. This is the cost of the variable input.
One of our clients is a major homebuilder in the Midwest. This company believes that sales of their new homes are highly correlated with business cycles in the overall US economy.
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