Figure 8.5.2
-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.

Question

Figure 8.5.2
-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.

Quizplus · Accepted Answer

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.

Figure 8.5.2 -Refer to Figure 8.5.2 Above. the Shift in the Marginal