Are the costs of owning a car fixed, variable, or mixed?
According to a recent news article in the Wall Street Journal (“Mercedes or Ford, It Costs a Lot More Than You Think,” Wall Street Journal, Sunday Journal, March 15, 2014), the average consumer spends more than $760 a month on his/her vehicle and related expenses.
- Purchase price of the car
- Finance charges on car loan
- Gas
- Oil changes
- Routine maintenance
- Tires
- Insurance
- License plate/registration
- SiriusXM Radio subscription cost
- Car washes
- Garage/parking
- Parking tickets
- Speeding tickets
- Value of car owner’s time spent commuting
Questions
- Which of the costs above would most likely be variable with respect to the number of miles the car owner drives?
- Which of the costs above would most likely be fixed with respect to the number of miles the car owner drives?
- Which of the costs above would most likely be mixed with respect to the number of miles the car owner drives?