The reduction in fixed cost is not without effect even if the firm doesn't change price or output. As we see to the right, profits increase, which only makes sense. If nothing changes except a reduction in costs how can profits do anything else but increase?

    Prior to the reduction in fixed costs profits were the blue shaded area. After the cost reduction profits are the green shaded area, clearly a larger area. Again, this may make entry more likely, otherwise this is a new long-run equilibrium for the firm.

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