The figure above shows some of a firm's cost curves.
-A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.
A) only curve A shifts
B) only curve B shifts
C) only curve C shifts
D) both curves A and C shift
E) both curves B and C shift

Question

The figure above shows some of a firm's cost curves.
-A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.
A) only curve A shifts 
B) only curve B shifts 
C) only curve C shifts 
D) both curves A and C shift 
E) both curves B and C shift

Quizplus · Accepted Answer

The cost of utilities is a variable cost, affecting the firm's total cost directly. Curve B represents the firm's total cost, and Curve C represents the firm's marginal cost, both of which will shift upward with an increase in utility costs. Curve A, typically representing fixed costs or another unrelated cost component, would not shift due to changes in variable costs like utilities.

The Figure Above Shows Some of a Firm's Cost Curves