Quasi-Fixed Costs

Quasi-fixed costs are a distinct category of production costs. These costs (QFC) are not tied to the level of output (Y) but are only incurred if the business is operational. Like fixed costs (FC), quasi-fixed costs remain constant regardless of the production volume. However, as soon as output is positive (Y > 0), quasi-fixed costs also become nonzero.

Y > 0 ⇔ QFC > 0

Y = 0 ⇔ QFC = 0

When production drops to zero (Y = 0), quasi-fixed costs are eliminated. This is a key distinction between quasi-fixed and fixed costs. Unlike quasi-fixed costs, fixed costs (FC) must still be covered by the company even when production ceases entirely.