If the Price of Labor or Some Other Variable Resource

question 407

Multiple Choice

If the price of labor or some other variable resource decreased, the

• A)AVC curve would shift upward.
• B)AFC curve would shift downward.
• C)AFC curve would shift upward.
• D)MC curve would shift downward.

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Definitions:

Robot Hours

The amount of time robots are operational and performing tasks in place of human labor.

Cost-output Elasticity

Cost-output elasticity measures the responsiveness of the cost of production to changes in the quantity of output produced, indicating the scale economies in production.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Marginal Cost

The expenditure required to produce an additional unit of a product.