Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans had shot up 44 percent in the first nine months of 2008. How does this affect Rogue's short run costs?
A) Short run variable costs would increase.
B) Short run fixed costs would decrease.
C) Short run total costs would decrease.
D) Short run average fixed costs would increase.

Question

Quizplus · Accepted Answer

Since cocoa beans are an input in the production of chocolate bars, an increase in the price of cocoa beans would lead to an increase in the cost of producing chocolate bars. This would result in an increase in short run variable costs for Rogue Chocolatier.

Minneapolis Business Rogue Chocolatier Sells Specialty Chocolate Bars with a High