Changes in the cost of fixed factors of production cause a price taker to

Question

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Since a price taker cannot influence market prices, it will have to adjust its output level to changes in production costs. If the cost of fixed factors of production increase, the firm's cost curve will shift up, which will reduce profit margins. The firm may choose to lower its output level to maintain profitability, which means that it would reduce its supply in the market. As a result, the firm will have less influence on the market price. Therefore, the firm will experience a change in the size of its profit or loss.

Changes in the Cost of Fixed Factors of Production Cause