In the context of a perfectly competitive market, if a firm experiences an increase in fixed costs while the price elasticity of demand remains constant, what will be the likely impact on the firm's revenue curves?

In a perfectly competitive market, firms are price takers, meaning they sell their products at the market price. When a firm experiences an increase in fixed costs, such as rent or salaries, this does not directly affect the price of the product or the demand for it. Instead, the firm’s total revenue curve, which shows the relationship between the price of the product and total revenue, will remain unchanged because revenue depends on price and quantity sold. However, the increase in fixed costs will affect the firm’s profitability, as it will need to sell the same amount of product to cover these higher costs. For example, if a bakery's rent increases, it still sells cakes at the same price, but now it has to sell more cakes to make the same profit as before.