What Is the Graphical Effect of a Decrease in the Prices

question 113

Multiple Choice

What is the graphical effect of a decrease in the prices of factor inputs such as labour and materials?

• A)The SRAC curve would shift down and the LRAC curve would shift up.
• B)The SRAC curve would shift up and the LRAC curve would shift down.
• C)Both the SRAC curve and the LRAC curve would shift up.
• D)Both the SRAC curve and the LRAC curve would shift down.

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