Answer to Question #85322 in Microeconomics for aisha amjad

Question #85322
Consider a profit-maximising firm in the short run that is making large abnormal profits. The price it can charge depends on its output. Draw a diagram to show how its output will be affected if it experiences a small increase in its fixed costs. Explain your diagram.
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Expert's answer
2019-02-21T10:51:08-0500

If a profit-maximising firm in the short run experiences a small increase in its fixed costs, then itsis total costs will increase, but the amount of profit-maximizing output will not change, it will make lower profits.


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