Figure 8-5 -Refer to Figure 8-5.Which of the Following Would Most Likely

question 96

Multiple Choice

Figure 8-5

-Refer to Figure 8-5.Which of the following would most likely cause the average total cost curve of a firm producing steel bolts to shift from ATC₁ to ATC₂?

• A)an increase in demand for steel bolts
• B)an increase in the market price of steel bolts
• C)diminishing returns for the variable factors used to produce steel bolts
• D)an increase in the price of steel

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Definitions:

Unit Price

The cost per unit of a product or service, making it easier to compare the value of similar items.

Market Price

The current market price for buying or selling an asset or service in an open exchange.

Purely Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and free entry and exit of firms.

Short Run

A period in which at least one factor of production is fixed, affecting the ability of a business to increase output in response to increased demand.