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djsmyers djsmyers
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Posts: 764
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6 years ago
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.
Textbook 
Microeconomics: Theory and Applications with Calculus

Microeconomics: Theory and Applications with Calculus


Edition: 4th
Author:
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wrote...
6 years ago
True. 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.
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