Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved
To the right we show a monopolist maximizing profits. How
would this firm respond to a change in fixed costs? Remember that
fixed costs are costs that are unrelated to the firms level of
output. This means that the firm can't do anything to avoid them
in the short run.
Examples of fixed costs include: building rental, property
taxes, most kinds of insurance, forgone interest on capital expenditures,
and forgone salary of the owner(s).
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved