When a firm adds physical capital,its fixed cost will decrease in the short run.

Name: When a firm adds physical capital,its fixed cost will decrease in the short run.
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Question

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Adding physical capital will increase a firm's fixed cost in the short run because it requires an investment to purchase the new equipment or property. However, if the capital investment leads to increased production and efficiency, it may lower the firm's average total cost in the long run.

When a Firm Adds Physical Capital,its Fixed Cost Will Decrease