Everything else equal, the AC curve will shift when
A)the price of the product rises.
B)technological change raises the MPP of one input.
C)output rises.
D)increasing returns to scale are present.

Question

Quizplus · Accepted Answer

Technological change that raises the marginal physical productivity (MPP) of an input will decrease the average cost (AC) curve and shift it downward. The other options listed will cause a movement along the AC curve rather than a shift.

Everything Else Equal, the AC Curve Will Shift When