Sue's Surfboards rents the factory building in which it produces surfboards.The rent is increased by $200 a week.If other things remain the same,the average fixed cost curve ________,the average variable cost curve ________,the average total cost curve ________,and the marginal cost curve ________.
A)does not change;shifts upward;shifts upward;shifts upward
B)shifts upward;does not change;shifts upward;does not change
C)shifts upward;does not change;does not change;shifts upward
D)shifts upward;does not change;shifts upward;shifts upward
E)shifts upward;shifts upward;shifts upward;shifts upward

Question

Quizplus · Accepted Answer

The increase in rent affects fixed costs, so the average fixed cost curve shifts upward. Variable costs are not affected, so the average variable cost curve does not change. The average total cost curve shifts upward due to the increase in fixed costs, but the marginal cost curve does not change as it is related to variable costs.

Sue's Surfboards Rents the Factory Building in Which It Produces