Asked by Nikki Tajdar on May 18, 2024
Verified
Refer to Figure 8.5.2 above. The shift in the marginal cost curve implies:
A) an increase in the price of an input, which reduces the profit-maximizing level of output.
B) an decrease in the price of an input, which increases the profit-maximizing level of output.
C) a decrease in the price of an input, which shifts the marginal cost curve upward.
D) a deadweight loss when costs increase and output remains the same.
Marginal Cost Curve
A graph that shows the change in the cost of producing one more unit of a good.
Profit-Maximizing
The process or strategy of adjusting production and sale to achieve the highest possible profit.
Input Price
The cost associated with purchasing the inputs or resources required for production, including materials, labor, and capital.
- Analyze how technological progress and the prices of inputs influence a firm's cost curves and optimum output quantity.
Verified Answer
CS
Clever SalgadoMay 22, 2024
Final Answer :
A
Explanation :
A shift in the marginal cost curve usually reflects a change in the costs of production. An increase in the price of an input would raise the costs associated with producing each additional unit, thus shifting the marginal cost curve upward and reducing the profit-maximizing level of output.
Learning Objectives
- Analyze how technological progress and the prices of inputs influence a firm's cost curves and optimum output quantity.
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