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hi there in this short business topic video were just going to introduce and explain briefly the concept of business costs costs youll youll come across everywhere as you study business because these are the amounts that a business incurs in order to operate to undertake its business for example making goods or providing services and costs are even more important than that because they are often the reason why a business performs well or poorly in terms of profit and also they can be the reason why a business suffers from cash flow problems so its important to understand the nature of costs as well as how theyre controlled the most important distinction as you begin your study of business costs is to understand the difference between whats known as variable and fixed costs variable costs change as output changes in other words for example if output increases the variable cost per unit will mean that the total variable cost rises too by contrast fixed costs do not change in relat