In perfect competition, a change in fixed cost:

Name: In perfect competition, a change in fixed cost:
Brand: Quizplus
Rating: 4.7 (40 reviews)

Question

Quizplus · Accepted Answer

In perfect competition, a change in fixed cost does not affect price or output in the short run because firms make production decisions based on variable costs. However, in the long run, changes in fixed costs can lead to entry or exit, adjusting the market supply and bringing prices back to a level where firms earn zero economic profits, consistent with perfect competition dynamics.

In Perfect Competition, a Change in Fixed Cost