Question

Explain the following in brief:
(a) Prime cost
(b) Fixed cost

Hint:

Remember this key relationship for exam questions: $$\text{Volume } \uparrow \quad \implies \text{ Total Fixed Cost (Constant)} \quad \implies \text{ Fixed Cost per Unit } \downarrow$$ $$\text{Volume } \uparrow \quad \implies \text{ Total Variable Cost } \uparrow \quad \implies \text{ Variable Cost per Unit (Constant)}$$

Answer 1