Which of the following will cause the average cost curve of making cigarettes to shift?
A) a $5 million penalty charged to each cigarette maker
B) a $1 per pack tax on cigarettes
C) a $1 an hour wage increase paid to all cigarette production workers
D) All of the above.

Question

Quizplus · Accepted Answer

All of the options listed will cause the average cost curve of making cigarettes to shift. A penalty increases the fixed costs, a tax per pack effectively raises the variable cost per unit, and a wage increase raises the cost of production labor, all of which affect the average cost of production.

Which of the Following Will Cause the Average Cost Curve