Consider a firm's short- run cost curves.When capital is a fixed factor,a rise in the cost of labour
A)shifts the marginal cost curve upwards.
B)shifts the AVC curve down.
C)leaves the MC curve unchanged.
D)shifts the total product curve downwards.
E)leaves the ATC curve unchanged.

Question

Quizplus · Accepted Answer

When capital is fixed, a rise in the cost of labor will increase the variable cost and therefore increase the marginal cost curve. The AVC and ATC curves will also shift upwards, but not as much as the marginal cost curve. The total product curve is not affected by changes in input prices.

Consider a Firm's Short- Run Cost Curves