Question
How would each of the following affect the firm's marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves? The government imposes
How would each of the following affect the firm's marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves?
The government imposes a fixed amount of tax. | Answer 1 Choose...no change MC, no change AVC, decreases ATC decrease MC, decrease AVC, decrease, ATC increase MC, no change AVC, increase, ATC increase MC, increase AVC, increase, ATC no change MC, no change AVC, increases ATC decrease MC, no change AVC, decrease, ATC |
The rent that the firm pays on the building that it leases decreases. | Answer 2 Choose...no change MC, no change AVC, decreases ATC decrease MC, decrease AVC, decrease, ATC increase MC, no change AVC, increase, ATC increase MC, increase AVC, increase, ATC no change MC, no change AVC, increases ATC decrease MC, no change AVC, decrease, ATC |
A decrease in material costs. | Answer 3 Choose...no change MC, no change AVC, decreases ATC decrease MC, decrease AVC, decrease, ATC increase MC, no change AVC, increase, ATC increase MC, increase AVC, increase, ATC no change MC, no change AVC, increases ATC decrease MC, no change AVC, decrease, ATC |
An increase in wages. | Answer 4Choose...no change MC, no change AVC, decreases ATC decrease MC, decrease AVC, decrease, ATC increase MC, no change AVC, increase, ATC increase MC, increase AVC, increase, ATC no change MC, no change AVC, increases ATC decrease MC, no change AVC, decrease, ATC |
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