The prices of raw materials increase in a purely competitive industry. This change will result in a(n)
A) decrease (downward shift) in the average total cost curve for firms in the industry.
B) decrease (downward shift) in the marginal revenue curve for firms in the industry.
C) increase (upward shift) in the marginal cost curve for firms in the industry.
D) increase (rightward shift) in the short-run supply curve for firms in the industry.

Question

Quizplus · Accepted Answer

An increase in the prices of raw materials raises production costs, causing the marginal cost curve to shift upward.

The Prices of Raw Materials Increase in a Purely Competitive