Figure 7-5 Figure 7-5 Shows Cost and Demand Curves

question 174

Multiple Choice

Figure 7-5 Figure 7-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 7-5.If the firm's fixed cost increases by $1000 due to a new environmental regulation,what happens in the diagram above?

• A) All the cost curves shift upward.
• B) Only the average variable cost and average total cost curves shift upward; marginal cost is not affected.
• C) Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.
• D) None of the curves shift; only the fixed cost curve, which is not shown here, is affected.

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