Refer to the Diagram, Which Relates to Firm A

question 166

Multiple Choice

Refer to the diagram, which relates to Firm A. Which of the following would shift A's average total cost curve from ATC₁ to ATC₂?

• A)replacement of old equipment with new, more productive equipment embodying technological advance
• B)a decrease in the incomes of A's customers
• C)a move along A's total product curve (not shown)
• D)the increase in the price of one of the major inputs used to produce A's product

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Definitions:

Interest Revenue

Income earned from lending funds or investing in interest-bearing financial instruments.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Wages Expense

Costs incurred by a company for the payment of hourly employee wages within a specific accounting period.

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use.