Asked by Kesjan Kalemi on Apr 29, 2024
Verified
Higher input prices result in:
A) upward shifts of MC and reductions in output.
B) upward shifts of MC and increases in output.
C) downward shifts of MC and reductions in output.
D) downward shifts of MC and increases in output.
E) increased demand for the good the input is used for.
MC Shifts
Changes in the marginal cost curve, which can occur due to variations in factors like input prices, technology, or regulations.
Output Changes
Alterations in the quantity of goods or services produced by a firm, industry, or economy, influenced by factors like technology, input prices, and demand.
- Assess the impact of technological advancements and input costs on a company's cost structures and ideal production level.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
A
Explanation :
Higher input prices increase the costs of production, which results in upward shifts of the marginal cost (MC) curve. As a result, firms reduce their output to maintain their profit margins. Therefore, higher input prices result in upward shifts of MC and reductions in output.
Learning Objectives
- Assess the impact of technological advancements and input costs on a company's cost structures and ideal production level.