If a monopolistically competitive firms incurs an increase in fixed costs, its price will rise and its output will fall.

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​If a monopolistically competitive firms incurs an increase in fixed costs, its price will rise and its output will fall.

Shakari Meeks · Accepted Answer

Final Answer : False, Explanation :  In the short run, an increase in fixed costs does not affect the price or output level of a monopolistically competitive firm because the firm's price and output decisions are based on marginal costs, not fixed costs.

If a monopolistically competitive firms incurs an increase in fixed costs, its price will rise and its output will fall.

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​If a monopolistically competitive firms incurs an increase in fixed costs, its price will rise and its output will fall.

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If a monopolistically competitive firms incurs an increase in fixed costs, its price will rise and its output will fall.