Figure 7-13
-Everything else equal, the AC curve will shift downward if
A)input prices rise.
B)input MPPs rise.
C)output rises.
D)output falls.

Name: Figure 7-13 -Everything else equal, the AC curve will shift downward if A)input prices rise. B)input MPPs rise. C)output rises. D)output falls.
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Question

Figure 7-13 
-Everything else equal, the AC curve will shift downward if
A)input prices rise. 
B)input MPPs rise. 
C)output rises. 
D)output falls.

Quizplus · Accepted Answer

The AC (Average Cost) curve will shift downward if the Marginal Physical Product (MPP) of inputs rises because this means each input is producing more output, leading to a lower cost per unit of output.

Figure 7-13 -Everything Else Equal, the AC Curve Will Shift Downward If