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What happens to output as costs rise? Show a profit maximization graph with an increase in...

What happens to output as costs rise? Show a profit maximization graph with an increase in costs.

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Answer #1

It can be mentioned that if the costs increase, the similar amount of budget the output decreases because when you understand that it if there is an increase in the cost and you have a constant budget of production, you can produce less than before.

The given graph shows the decrease in supply due to increase in cost as a result of which the price increased as shown in the figure so that the profit levels change where earlier profi dots and the current profits were also given here during a perfectly competitive market

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