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Question
A firm has to pay a fixed rent of ₹ 500 for the postpaid mobile bill and further pay extra charges for the calls made in a month. Identify the type of cost mentioned here.
Options
Fixed cost
Variable cost
Semi-Fixed cost
Unit cost
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Solution
Semi-Fixed cost
Explanation:
The post-paid mobile bill is a prime example of a semi-fixed cost because it combines fixed and variable expense components. The base rate of ₹500 is fixed and must be paid regardless of usage. Additional charges for calls are variable and grow in proportion to monthly activity levels.
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