Which of the following best describes how fixed costs impact operational efficiency in a business?

Fixed costs are expenses that do not change regardless of how much a business produces or sells, such as rent or salaries. When a business has high fixed costs, it needs to sell a lot of products to cover those costs and start making a profit. This can make it harder for the business to be efficient because it may push them to produce more than what the market actually needs, leading to waste or excess inventory. For example, if a factory pays a large monthly rent but only sells a few products, it may struggle to stay profitable and could end up wasting resources. Therefore, managing fixed costs wisely is important for a business to operate efficiently and adapt to changes in demand.