Skip to main content

DragIT - fixed cost curve

In the simulation below, drag the slider to see the impact of changes in fixed costs on the fixed cost curve.

If you would prefer to open this interaction in a new web window, then simply follow the link below:

question

1

Fixed cost changes

Select all the changes below that will result in the fixed cost curve shifting vertically upwards.

a)
b)
c)
d)
e)
f)
a) This will shift the fixed cost curve upwards. An increase in rent will increase fixed costs as rents do not generally change with the level of output.a) This will shift the fixed cost curve upwards. Rent is generally considered a fixed cost as it doesn't change with output. An increase in rent will therefore shift the fixed cost curve vertically upwards.b) This will shift the fixed cost curve downwards. Though insurance payments are generally considered a fixed cost, a decrease in insurance payments will shift the fixed cost curve downwards.b) This will shift the fixed cost curve downwards. Though insurance payments are generally considered a fixed cost, a decrease in insurance payments will shift the fixed cost curve downwards.c) This is a change in variable cost. Wages for production staff are generally considered variable costs as they increase with output.c) This is a change in variable cost. Wages for production staff are generally considered variable costs as they increase with output, so changes in wages will not affect the fixed cost curve.d) This is a change in variable cost. Fuel costs for delivery vehicles are generally considered variable costs as they increase with output.d) This is a change in variable cost. Fuel costs for delivery vehicles are generally considered variable costs as they increase with output, so changes in fuel costs will not affect the fixed cost curve.e) This will shift the fixed cost curve upwards. Security costs will generally be considered fixed costs and so higher security costs will shift the fixed cost curve vertically upwards.e) This will shift the fixed cost curve upwards. Security costs will generally be considered fixed costs as they don't vary with output and so higher security costs will shift the fixed cost curve vertically upwards.f) This will shift the fixed cost curve upwards. Business rates will generally be considered fixed costs and so higher business rates will shift the fixed cost curve vertically upwards.f) This will shift the fixed cost curve upwards. Business rates will generally be considered fixed costs as they don't vary with output and so higher business rates will shift the fixed cost curve vertically upwards.
Check your answer