Suppose a pizza restaurant has two pizza ovens that may be used to bake pizzas, so the restaurant has a maximum capacity constraint that affects the shape of the firm's short-run marginal cost curve. What happens to maximum capacity segment of this curve if the firm adds another pizza oven?
A) Shifts upward
B) Shifts downward
C) Shifts leftward
D) Shifts rightward

Question

Quizplus · Accepted Answer

Adding another pizza oven will increase the maximum capacity of the restaurant, which means the firm can produce more pizzas at a lower cost per unit. This means that the maximum capacity segment of the short-run marginal cost curve will shift to the right.

Suppose a Pizza Restaurant Has Two Pizza Ovens That May