AVC - Is unaffected, and therefore the curve does not shift. Decreases, and thre

Question

AVC - Is unaffected, and therefore the curve does not shift.
   Decreases, and threfore the curve shifts down.
Increases, and therefore the curve shifts up.

AFC - Is unaffected, and therefore the curve does not shift.
   Decreases, and threfore the curve shifts down.
Increases, and therefore the curve shifts up.

9. Cost-curve shifters The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and average fixed cost (AFC) curve for Ginny's Pizza Parlor when Ginny pays her workers a wage of $15 per hour. ATC AVC AFC OUTPUT (Pizzas per day) Suppose the wage Ginny pays her workers increases to $20 per hour. In the following table, indicate how each cost and curve is affected, if at all Cost ATC AVC AFC Effect on Cost and Curve

Explanation / Answer

ATC increases, and therefore, the curve shifts up

AVC increases and shifts up

AFC is not affected.

Since labor is a variable cost only the AVC and ATC are affected.

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