Which one among the following is a fixed cost to a manufacturing firm in the short run ?

In economic theory, costs are classified into fixed and variable categories in the short run. Fixed costs are expenditures on factors of production that do not vary with the level of output [2]. These costs remain constant even if production is zero. Insurance on buildings is a classic example of a fixed cost because the premium is typically a predetermined contractual amount that must be paid regardless of the manufacturing volume. Conversely, variable costs change in direct proportion to production levels. Overtime payments to workers, the cost of energy (utilities), and the cost of raw materials are all variable costs because they increase as the firm scales up its production to meet demand. Therefore, insurance on buildings is the only fixed cost among the provided options.

Sources

1. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 3: Production and Costs > 3.2 THE SHORT RUN AND THE LONG RUN > p. 38