The average variable cost curve will shift upward if
A)there is an increase in fixed cost.
B)there is a technological advance.
C)the price of the variable input decreases.
D)the price of the variable input increases.
E)the price of output increases.

Question

Quizplus · Accepted Answer

An increase in the price of the variable input will increase the average variable cost curve because it will cost more to produce each unit of output. Conversely, a decrease in the price of the variable input would lower the average variable cost curve. The other options listed do not directly affect the average variable cost curve.

The Average Variable Cost Curve Will Shift Upward If