a. A reduction in business property taxes MC No change b. An increase in the nominal wages of production workers MC AVC Shift down MC Shift down AVC AFC Shift down Shift up Shift up c. A decrease in the price of electricity AVC Shift down AFC No change AFC No change ATC Shift down ATC Shift up ATC ✓ Shift down
a. A reduction in business property taxes MC No change b. An increase in the nominal wages of production workers MC AVC Shift down MC Shift down AVC AFC Shift down Shift up Shift up c. A decrease in the price of electricity AVC Shift down AFC No change AFC No change ATC Shift down ATC Shift up ATC ✓ Shift down
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 8P
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