How Would a $10 Increase in an Avoidable Per-Unit Fixed

question 71

Multiple Choice

How would a $10 increase in an avoidable per-unit fixed cost effect a price-taking firm's supply curve?

• A) MC would increase by $10, and AC would not change.
• B) AC would increase by $10, and MC would not change.
• C) MC and AC would both decrease by $10.
• D) MC and AC would both increase by $10.

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Definitions:

Dollar Price

Dollar price refers to the cost or value of a good or service expressed in terms of the amount of U.S. dollars required to purchase it.

Demand For German Goods

The desire or need for products made in Germany by consumers both within the country and internationally.

U.S. Current Account Deficit

A measurement of the country’s international trade where the value of the goods and services it imports exceeds the value of the products it exports.

Gold Standard

A monetary system in which the standard economic unit of account is based on a fixed quantity of gold, historically used by various countries.