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When the Prices of All Inputs Increase by a Proportionate

Question 1

Multiple Choice

When the prices of all inputs increase by a proportionate amount:


A) the firm's total cost curve will remain unchanged since the cost-minimizing combination of inputs is unchanged.
B) the firm's total cost curve may rotate upward or may leave the long-run total cost curve unchanged.
C) will always rotate the long-run total cost curve upward.
D) could actually rotate the long-run total cost downward if the firm chooses to produce a lower level of output.

Correct Answer:

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