Refer to the Information Provided in Figure 10

question 196

Multiple Choice

Refer to the information provided in Figure 10.2 below to answer the question(s) that follow. Figure 10.2
-Refer to Figure 10.2. This firmʹs marginal cost curve has shifted from MC₁ to MC₀. A likely explanation for this is that

• A) the productivity of a variable input increased.
• B) the price of a variable input increased.
• C) the demand for the firmʹs product increased.
• D) the supply of a variable input increased.

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Definitions:

Long-Run Curve

The graphical representation in economics of the relationship between output and input when all inputs are variable, showing potential economies of scale.

Marginal-Cost Curve

A graph that displays the cost of producing one additional unit of a good or service.

Average-Total-Cost Curve

A graph that displays the mean total cost of manufacturing across various output quantities, generally characterized by a U-shape because of the effects of economies and diseconomies of scale.

Long-Run Time Period

A duration in economics where all factors of production and costs are variable, allowing for complete adjustment.