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    mammainschool's Avatar
    mammainschool Posts: 1, Reputation: 1
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    #1

    Apr 6, 2008, 03:46 PM
    Fixed Costs
    When fixed costs decrease, what does this do for sales?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Apr 6, 2008, 07:14 PM
    Usually nothing as companies don't want to lower the price and would rather take the extra profit margin.

    But in theory, it would lower sales price and therefore increase sales.
    christo010's Avatar
    christo010 Posts: 1, Reputation: 1
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    #3

    Oct 30, 2009, 06:44 AM
    The profit margin rise. Fixed cost decrease. Reduce product price leads to increase sales .
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #4

    Oct 30, 2009, 04:06 PM

    Christo101, please first read our guidelines for homework:
    https://www.askmehelpdesk.com/financ...-b-u-font.html
    I'm not positive that was a homework question but very likely was. Be careful not to just answer it for people.

    The thread is well over a year old.

    And the answer is incorrect. Reducing fixed costs doesn't directly do anything to sales. It's not automatic that a company will reduce their price. They may have been intentionally trying to reduce fixed costs because they are losing money or in order to get a higher profit margin! Many scenarios could exist. If this was for homework, that is not a conclusion they would draw, nor would they likely get into an increase in quantity demanded.
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