If the price of corn, an input to corn chips, increases, this will cause the short- run average total cost curves to shift ________ and the long- run average cost curve to shift_______ .

Question

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An increase in the price of corn, an input to corn chips, will increase the cost of production for firms that produce corn chips. In the short run, firms may not be able to adjust their production processes to use alternative inputs, so the average total cost curve will shift upward due to the higher cost of production. In the long run, however, firms will have more flexibility to adjust their production processes and potentially switch to alternative inputs, so the long-run average cost curve will also shift upward but to a lesser extent than the short-run curve.

If the Price of Corn, an Input to Corn Chips