When a firm's fixed cost rises, its total profit curve shifts
A)up at every output level.
B)down at every output level.
C)left at every profit level.
D)right at every profit level.

Question

Quizplus · Accepted Answer

When fixed costs increase, the total cost curve shifts upward by the amount of the increase. This means that at every output level, the firm's costs are higher, reducing the total profit the firm earns. Therefore, the total profit curve will shift downward at every output level.

When a Firm's Fixed Cost Rises, Its Total Profit Curve