Even though fixed costs do not affect the output decision,an increase in fixed costs results in a wider range of prices for which the firm operates at a loss.

Name: Even though fixed costs do not affect the output decision,an increase in fixed costs results in a wider range of prices for which the firm operates at a loss.
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Question

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An increase in fixed costs will shift AC upward but leave AVC unchanged.The gap between AVC and AC represents prices at which the firm will operate at a loss.

Even Though Fixed Costs Do Not Affect the Output Decision,an