Suppose fixed costs rise to $200.What will happen in the market?
A)The firm will decrease its output and lower its price.
B)The firm will increase the price.
C)The firm will shut down immediately.
D)The firm continues to produce the same output and charge the same price.

Question

Quizplus · Accepted Answer

Fixed costs do not affect the firm's marginal cost or decision to produce in the short run, so the firm will continue to produce the same output and charge the same price.

Suppose Fixed Costs Rise to $200