In the Above Figure, an Increase in Cost of the Cheese

question 18

Multiple Choice

In the above figure, an increase in cost of the cheese used to produce pizza

• A) results in a movement from point b to point a.
• B) results in a movement from point a to point b.
• C) shifts the supply curve from S to S2.
• D) shifts the supply curve from S to S1.
• E) has no effect.

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Definitions:

Marginal Product

The supplementary yield achieved by the utilization of one additional unit of a variable factor, with all other resources remaining fixed.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent or salaries, over a relevant period.

Variable Cost

Refers to expenses that vary directly with the level of production or output, such as raw materials and labor costs.

Total Cost

The full price of manufacturing that incorporates both stable and changing expenses.