Suppose a price taker is collecting $1,345 in total revenue and the total cost of its fixed factors of production increases from $200 to $300.One can speculate that the firm will

Question

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An increase in fixed costs does not affect the firm's output decision in the short run, as output is determined by marginal cost and marginal revenue. However, the increase in fixed costs will reduce the firm's profit, leading to a smaller profit or a greater loss.

Suppose a Price Taker Is Collecting $1,345 in Total Revenue