Fixed Costs Impact of The Optimal Level of Publisher Output Essay

Fixed Costs Impact of The Optimal Level of Publisher Output - Essay Example The essay "Fixed Costs Impact of The Optimal Level of Publisher Output" talks about the fixed costs and their effect on the optimal level of output in the context of the publisher. This is because as per the argument presented earlier, the optimizing level of the publisher output is at the point where Marginal Cost (MC) = Marginal Revenue (MR). Fixed costs have no impact at all on the profit maximizing output of the author. The earlier the author takes a simple percentage of retail prices. Fixed costs do not vary at all regardless of the variance in output. A variance in a firm’s fixed cost outlays has no impact upon the price levels for profit maximization. An example is a scenario where fixed costs are escalated and the impact observed on the price of profit-maximization is none as well as output. This is as long as that company remains in business. To offset rises in fixed costs, the firm’s management can do nothing at all. The reason is that fixed costs do not vary at all with a variance in output levels by definition. Thus, whether the business is booming or in a trough, fixed costs remain the same. The optimal condition MPl/Pl = MPk/Pk is mathematically derived in a case of optimization in a scenario of two outputs. These outputs are capital and labor. For the manufacturer to optimize production, they assume that the function of production Q is a function of both labor and capital as well as the fact that the costs to the firm are prices of the resources and fixed costs times the units of every factor employed.