If output increases,a firm will move along its short-run average total cost curve in the short run until it has time to adjust its fixed cost.

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As output increases, a firm will move along its short-run average total cost curve in the short run until it has time to adjust its fixed cost. This is because in the short run, fixed costs are already sunk and cannot be adjusted, so the firm can only vary its variable costs to increase output, which leads to movement along the short-run ATC curve. In the long run, the firm can adjust its fixed costs by changing the size of its operations, which could result in a shift in the ATC curve.

If Output Increases,a Firm Will Move Along Its Short-Run Average