Which term refers to costs that must be paid regardless of production rate?

The term that refers to costs that must be paid regardless of production rate is fixed costs. Fixed costs are expenses that do not change based on the level of production or sales. These are incurred even when production is zero, making them essential for maintaining the basic operational capability of a business. Examples of fixed costs include rent, salaries of permanent staff, and insurance.

In contrast, variable costs fluctuate with production levels, meaning they increase when production increases and decrease when production slows down. Operational costs encompass both fixed and variable costs associated with running a business, while marginal costs deal specifically with the incremental cost of producing one additional unit of a product. Thus, fixed costs uniquely represent the expenses that remain constant regardless of how much or how little a company produces.