Refer to the accompanying graph to answer the following questions.

-If the firm depicted in the graph had to pay higher rent to its landlord,we would expect its ________ curve to shift ________.

Question

Refer to the accompanying graph to answer the following questions.
 
-If the firm depicted in the graph had to pay higher rent to its landlord,we would expect its ________ curve to shift ________.

Quizplus · Accepted Answer

An increase in rent would be considered a fixed cost, which would shift the ATC curve upward. This is because fixed costs are not affected by changes in the level of output, so they will have a greater impact on the average cost of production. The other curves (AVC and MC) are more influenced by changes in variable costs, which are not affected by changes in fixed costs like rent.

Refer to the Accompanying Graph to Answer the Following Questions