When discussing costs, what is the primary characteristic of fixed costs?

Fixed costs are expenses that do not change with the level of production or sales within a certain range of activity. Regardless of whether a business produces a little or a lot, fixed costs remain constant. This includes expenses such as rent, salaries of permanent staff, and insurance. These costs are incurred even when no production takes place, which makes them essential for understanding a business's financial structure.

The ability of fixed costs to remain constant makes them predictable and easier to budget over time. These characteristics are what differentiate fixed costs from variable costs, which do fluctuate based on production levels. Understanding fixed costs is crucial for breakeven analysis and for making informed pricing and production decisions in agribusiness management.