Suppose that wood is the primary variable input in the production of furniture. If the price of wood increases, which of the following is likely to happen?

Question

Quizplus · Accepted Answer

An increase in the price of wood, a variable input, increases the cost of producing each unit of furniture, leading to a rise in both the marginal cost and the average total cost. However, average fixed costs remain unchanged because they are not affected by changes in the cost of variable inputs.

Suppose That Wood Is the Primary Variable Input in the Production