Unit 7: Fixed Costs and Variable Costs – Discussion

Unit 7: Fixed Costs and Variable Costs –
Discussion
Week 7 Discussion Question due 9OCT2015
Throughout this course, many
discussion opportunities come up where you need to respond to other people’s
opinions and comments. Then respond to your Discussion topic after you have
completed your Reading.
Topics
Increase
in Fixed Costs
Increase in Fixed Costs
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:
a. the firm’s AFC (average fixed cost);
b.the firm’s AVC (average variable cost);
c. the firm’s ATC (average total cost); and,
d.the firm’s MC (marginal cost)?
2.
What changes, if any, is there
likely to be in these same cost CURVES?

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