Glossary · Micro · Production and costs

Fixed cost (FC)

A cost that does not change with output in the short run, like rent on the factory. It must be paid even if the firm makes nothing, which is why it does not affect the shutdown decision.

Also called: FC, total fixed cost, TFC

Taught in: Fixed, Variable, and Total Cost

Related terms

Variable cost (VC)Total cost (TC)Sunk costShutdown rule

More from production and costs

Average fixed cost (AFC)Average product of labor (APL)Average total cost (ATC)Average variable cost (AVC)Cobb-Douglas production functionEconomies and diseconomies of scaleIsoquantLaw of diminishing marginal returns

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