An increase in a monopolists fixed costs would:

a. possibly increase, decrease or not affect profit-maxmizing price and quantity, depending on the elasticity of demand.

b. not affect the profit-maximizing price or quantity, but it would change net revenues.

c. increase the profit-maximizing once and decrease the profit-maximizing quantity produced.

d. not affect revenue, the profit-maximizing price, or quantity.

e. none of the above.

d. not affect revenue, the profit maximizing price, or quantity.

Reason: The profit maximising output is set at the level where the marginal revenue equals the marginal cost. The marginal cost does not get affected by the fixed cost. Marginal cost is independent of fixed cost. So the level of output will remain same irrespective of the level of fixed cost. The price in case of monopoly is set corresponding to the level of MR = MC,in the average revenue curve. Since AR also does not change with the level of fixed cost, hence the profit maximising output and price will not change in case there is an increase in fixed cost.