Other things being equal, if a firm's marginal cost curve shifts upward at all output levels
A) the average total cost curve remains unchanged at all output levels.
B) the average variable cost curve remains unchanged at all output levels.
C) the average fixed cost curve remains unchanged at all output levels.
D) all of the above

Question

Quizplus · Accepted Answer

The average fixed cost (AFC) curve remains unchanged if the marginal cost (MC) curve shifts upward because AFC is determined by fixed costs divided by the quantity of output, which are unaffected by changes in marginal cost. Marginal cost changes impact variable costs, thus affecting average total cost (ATC) and average variable cost (AVC) but not fixed costs.

Other Things Being Equal, If a Firm's Marginal Cost Curve