How would a $10 increase in per-unit input costs affect a price-taking firm's supply curve?
A) MC would increase by $10, and AC would decrease by $10.
B) AC would increase by $10, and MC would decrease by $10.
C) MC and AC would both decrease by $10.
D) MC and AC would both increase by $10.

Question

Quizplus · Accepted Answer

An increase in per-unit input costs would raise both the marginal cost (MC) and average cost (AC) of production for a firm. This is because the cost of producing each additional unit (MC) and the average cost per unit (AC) would both include the higher input costs.

How Would a $10 Increase in Per-Unit Input Costs Affect