If wages a firm pays it workers increase, then
A) the firm's long-run average cost curve shifts upward.
B) the firm moves rightward along its long-run average cost curve to where it has diseconomies of scale.
C) the firm's long-run average cost curve does not shift and there is no movement along the long-run average cost curve.
D) the firm moves rightward along its long-run average cost curve but not necessarily to where it has diseconomies of scale.

Question

Quizplus · Accepted Answer

An increase in wages raises the firm's costs, causing the long-run average cost curve to shift upward.

If Wages a Firm Pays It Workers Increase, Then