An increase in fixed cost will, in the short run, alter the industry's output of
A)both a monopolist and a competitive industry.
B)only a monopolist.
C)only a competitive industry.
D)neither a monopolist nor a competitive industry.

Question

Quizplus · Accepted Answer

In the short run, fixed costs do not affect the output decisions of either a monopolist or a competitive industry because output decisions are based on marginal costs and revenues, not fixed costs.

An Increase in Fixed Cost Will, in the Short Run