If the price of an input decreases, each individual firm's ________ shifts downward and the ________ shifts to the right.
A) marginal revenue curve; marginal cost curve
B) marginal cost curve; industry supply curve
C) demand curve; industry supply curve
D) supply curve; marginal cost curve

Question

Quizplus · Accepted Answer

When the price of an input decreases, it becomes cheaper for firms to produce goods, which lowers their marginal cost of production. This shift in the marginal cost curve for each firm leads to a downward shift. As production becomes cheaper, firms are willing to supply more at each price level, causing the industry supply curve to shift to the right.

If the Price of an Input Decreases, Each Individual Firm's