If the price of an input increases, each individual firm's marginal cost curve shifts ________ and the industry supply curve ________.
A) downward; shifts to the left
B) downward; shifts to the right
C) up; does not change
D) up; shifts to the left

Question

Quizplus · Accepted Answer

When the price of an input increases, it becomes more expensive for firms to produce goods, leading to an increase in marginal costs. As a result, each firm's marginal cost curve shifts upwards. At higher production costs, firms will supply less at any given price, causing the industry supply curve to shift to the left.

If the Price of an Input Increases, Each Individual Firm's