What will an increase in wage rates cause in the short run?
A) an increase in MC, AVC, and ATC
B) an increase in AVC and a decrease in AFC
C) an increase in MC and ATC
D) an increase in both MC and AVC

Question

Quizplus · Accepted Answer

An increase in wage rates will increase the cost of labor, which will in turn increase the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) of production.

What Will an Increase in Wage Rates Cause in the Short