When the price of all inputs increase by the same percentage, the firm's total cost curve will remain unchanged since the cost-minimizing combination of inputs is unchanged.

Question

Quizplus · Accepted Answer

When the price of all inputs increases by the same percentage, the firm's total cost curve shifts upward because the total cost of producing any given level of output increases, even though the cost-minimizing combination of inputs remains unchanged.

When the Price of All Inputs Increase by the Same