A firm's cost can decrease for each of the following reasons, EXCEPT:
A)an increase in productivity due to experience.
B)an improvement in productivity of capital employed.
C)an improvement in work environment and quality of management.
D)an increase in input prices.

Question

Quizplus · Accepted Answer

An increase in input prices would result in an increase in the firm's cost, rather than a decrease. The other options - an increase in productivity due to experience, an improvement in productivity of capital employed, and an improvement in work environment and quality of management - can all lead to a decrease in a firm's cost by making its operations more efficient.

A Firm's Cost Can Decrease for Each of the Following