consider a firm producing wooden tables.its short-term cost structure is as follows:
A company's cost structure is the expenses that the firm must take into account when producing a good or providing a service. There are different types of cost structures and these include transaction costs, fixed costs and marginal costs. Characteristics of Cost Structures: Fixed Costs - Costs are unchanged across different applications. e.g. salary, rent Variable Costs - These costs vary depending on the amount of production of goods or services. e.g. music festivals Economies of Scale - Costs go down as the amount of good are ordered or produced. Economies of Scope - Costs go down due to incorporating other businesses which have a direct relation to the original product.