Refer to the Graph

question 409

Multiple Choice

Refer to the graph. Which one of the following would cause a move from point b on short-run average total cost curve ATC ₁ to point e on short-run average cost curve ATC ₂?

• A)diminishing marginal returns
• B)an increase in the wage rate
• C)a decrease in the wage rate
• D)increasing marginal returns

---

Definitions:

Preferred Mix

The optimal combination or assortment of goods, services, investments, or resources desired by an individual, firm, or economy.

Inverted-U Theory

A concept suggesting that there is an optimum level of a variable, beyond which its effect begins to decline or become negative, often applied to the relationship between income inequality and economic development.

Market Concentration Ratio

A measure used to determine the level of competition within a market by analyzing the market share of the largest firms within the industry.

R&D Expenditures

Funds invested by companies or governments in research and development to innovate or improve products, services, or processes.