If the cost of variable inputs used in a firm's production process rose,which of the following would not occur?
A) Its AVC curve would shift up.
B) Its ATC curve would shift up.
C) Its MC curve would shift up.
D) Its AFC curve would shift up.

Question

Quizplus · Accepted Answer

The average fixed cost (AFC) does not depend on the cost of variable inputs, as it only relates to the fixed costs of production, such as rent or capital equipment. Therefore, the AFC curve would not shift up in response to a rise in the cost of variable inputs. On the other hand, the AVC, ATC, and MC curves would shift up, as the higher cost of variable inputs would lead to a higher cost of producing each unit of output, increasing both the variable and total costs.

If the Cost of Variable Inputs Used in a Firm's