Everything else equal, the AC curve will shift when
A)the price of the product rises.
B)technical change raises the MPP of one input.
C)output is increased.
D)increasing returns to scale are present.

Question

Quizplus · Accepted Answer

When technical change raises the marginal product of one input, it can improve efficiency and lower average costs, leading to a shift in the AC curve. The other options are not likely to cause a shift in the AC curve. A rise in price may affect the profit margin but not necessarily the costs. Increasing output may lead to economies of scale, but this does not necessarily cause a shift in the AC curve.

Everything Else Equal, the AC Curve Will Shift When