- A change in fixed costs doesn't change output or price in the short run.
- A change in fixed costs doesn't change either P or MC. Since P = MC is profit maximizing, the firm won't change output in the
short run if only fixed costs change.
- Long run price will always equal minimum ATC.
- Any time price is different from minimum ATC, firms are either earning profits or losses. As a result, firms enter or exit the industry until profits are
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved