If fixed cost increases further, what impact will this have on this firm’s profit
maximising level of output in the short run?
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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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Answered by
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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?
https://brainly.in/question/6823840
Explanation of profit maximization?
https://brainly.in/question/12350231
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