Which one of the following would be considered a fixed cost of operating a motor vehicle?
A.Insurance premiums
B.Gasoline
C.Tune ups
D.New tires
i got B
Nope. Fixed costs are those costs that don't change. The more you travel by car, the more gas you use.
so is it D?
Your insurance premiums don't change.
No it is A. For everything else the cost can be different every time. However, your premiums are generally the same every month.
oh okay thank you
To determine which one of the options would be considered a fixed cost of operating a motor vehicle, let's review the definitions of fixed and variable costs.
Fixed costs: These are expenses that remain constant regardless of the level of production or usage. They do not change with the quantity produced or the distance traveled.
Variable costs: These costs vary with the level of production or usage. They change as the quantity produced or the distance traveled increases or decreases.
Now, let's evaluate each option to determine whether it represents a fixed or variable cost:
A. Insurance premiums: Insurance premiums are typically fixed costs since they remain constant regardless of the number of miles driven or the quantity produced. So, this option can be considered a fixed cost.
B. Gasoline: Gasoline costs are directly related to the distance traveled, making it a variable cost. As you drive more miles, the cost of gasoline increases.
C. Tune ups: Tune-ups generally refer to regular maintenance and servicing of the vehicle, which is essential for its smooth operation. These costs are typically classified as fixed costs since they occur at regular intervals or for a specific duration, regardless of usage or distance traveled.
D. New tires: The need for new tires arises based on the wear and tear of the existing tires. It's a variable cost since it depends on usage, road conditions, and the distance traveled.
Based on this analysis, the correct answer would be either A (Insurance premiums) or C (Tune ups), as both options are considered fixed costs.