Explain the difference between fixed costs and variable costs for firms, using Internet grocery shopping as an example.

Explanation:

Fixed cost is the cost that is constant for each unit of the item produced and does not depend upon the quantity of production. Fixed cost may include rent payment, insurance, interest payment.

whereas variable cost are cost that vary with quantity of output produced. It may include, labor cost, commissions, raw material, etc.

For Internet grocery shopping fixed cost can be cost of storing the grocery, insurance of inventory, electricity payment, cost of delivery to the customer, etc. whereas variable cost may be discount offered on quantity of purchase, Sale offers to attract customers, etc.

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