But with the five teams immediately above them also failing to pick up points, the German felt the result was not too damaging.
Magath said: "Nobody expected a win here at Man City, so if we lost it is normal. Nobody will care about it.
"But I am not happy with our performance after the second goal. Sure, it was a bad moment for us and we lost a player but that is no reason to stop playing.
"I think we have to play for 90 minutes here with 10 or 11 players. It doesn't matter."
Fulham have seven games remaining to save their top-flight status, starting with next week's home clash against Everton.
Magath said: "That we lost today is not a problem. We have to win our home games and that is important for us.
"We can look forward to next week but we have to talk about this situation, that we don't fight to the end of the game.
"It is not correct, especially for our fans. They came to Manchester, like us, to win and make a good game.
"We have to fight for 90 minutes and not only 60."