Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have on the firm's AFC (average fixed cost), AVC (average variable cost), ATC (average total cost) and MC (marginal cost) and therefore these cost curves? Why?
i. AFC (average fixed cost):
Ans: Will go up.
ii. AVC (average variable cost):
Ans: No effect
iii. ATC (average total cost):
Ans: Will go up.
Iv. MC (marginal cost):
Ans: Will go up.
Economics
You might also like to view...
Write an essay on the importance of a sound banking system in developing countries
What will be an ideal response?
Economics
The deficit is
A) the amount by which government purchases, transfers, and net interest exceed tax revenues. B) the amount by which government purchases and transfers exceed tax revenues. C) the primary deficit minus net interest payments. D) total tax revenues minus net interest minus government expenditures.
Economics