Increase in Fixed Costs Discussion Essay

n
1. Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have on the following:n
   n
   1. the firm’s AFC (average fixed cost);

   n

   2. the firm’s AVC (average variable cost);

   n

   3. the firm’s ATC (average total cost); and,

   n

   4. the firm’s MC (marginal cost)?

   n

   n

n

2. What changes, if any, is there likely to be in these same cost CURVES?

n

n