The ATC curve shifts upward if
A)factor prices rise.
B)a new technology is introduced.
C)more workers are hired.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

If factor prices rise, the cost of producing each unit of output increases, resulting in a higher average total cost curve (ATC). Therefore, the ATC curve shifts upward. A new technology or hiring more workers may lower the cost of production, resulting in a downward shift of the ATC curve, which is not the case in this question.

The ATC Curve Shifts Upward If