Fixed Costs Remain Constant Regardless of Output

Steps:

• Recall the definition: Fixed costs are expenses that do not change with production levels.
• Examine each option against this definition.
• Identify mismatches for A, B, and C.
• Confirm D aligns perfectly with the core trait.

Why D is correct:

• Fixed costs, by definition, are unavoidable payments like rent or salaries that persist even at zero output, ensuring business continuity.

Why the others are wrong:

• A: Fixed costs exist in both short and long run; the long run just allows all costs to vary.
• B: Raw materials and direct labor are variable costs, fluctuating with output.
• C: Fixed costs stay constant, not increasing with output; that's variable costs.

Final answer: D