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Economics (AS & A Level) · Oct / Nov 2024 · Paper 32 · Question 6

9708Types of cost, revenue and profit, short-run and long-run production

The diagram shows a profit maximising firm in equilibrium. What would happen to the firm's price, output and profit if there was an increase in its fixed costs?

  1. Aprice rise, output fall, profit rise
  2. Bprice rise, output fall, profit fall
  3. Cprice unchanged, output rise, profit rise
  4. Dprice unchanged, output unchanged, profit fall

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Correct answer: D. price unchanged, output unchanged, profit fall

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