Which of the following cost curves will NOT shift downward if the price of a variable input decreases?
A)Total cost
B)Average cost
C)Marginal cost
D)Average fixed cost

Question

Quizplus · Accepted Answer

Average fixed cost (AFC) is calculated as fixed cost divided by quantity produced. Since the price of the variable input does not affect fixed cost, it will not shift downward if the price of a variable input decreases. All other cost curves (total cost, average cost, and marginal cost) will shift downward because a decrease in the price of a variable input will lead to lower costs for producing each unit of output.

Which of the Following Cost Curves Will NOT Shift Downward