Question

If fixed cost increases further, what impact will this have on this firm’s profit
maximising level of output in the short run?

Answer 1

Answer:

A firm maximizes profit by operating where marginal revenue equals marginal cost. In the short run, a change in fixed costs has no effect on the profit maximizing output or price.

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Answer 2

Fixed cost increase will not have any effect in maximizing firm's profit in short run.

Explanation:

• A firm will maximize profit when marginal revenue is equal to the marginal cost.

• A fixed cost is that cost which remains constant throughout the production process . An example of fixed cost is the rent that the businessman pays for the land. The businessman has to pay the rent even if the production is not going on.

• During short run if the fixed cost increases it will not effect the profit of the firm.

To know more:

What are fixed and variable costs?

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Explanation of profit maximization?

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