Confetti Bakery sells bread, cake, and other baked goods. After analyzing their production and costs, management has determined the business has the following marginal and average cost curves. AC, MC B 30 D MC AC 60 90 Quantity per time period Refer to Scenario 8-2. If bad agricultural conditions cause the price of flour, a major input, to rise, what would happen to the bakery's marginal and average costs? O Both marginal and average cost curves shift up. O Both marginal and average cost curves shift down. O Marginal cost shifts up, while average cost shifts down. O Marginal cost shifts down, while average cost shifts up.
Confetti Bakery sells bread, cake, and other baked goods. After analyzing their production and costs, management has determined the business has the following marginal and average cost curves. AC, MC B 30 D MC AC 60 90 Quantity per time period Refer to Scenario 8-2. If bad agricultural conditions cause the price of flour, a major input, to rise, what would happen to the bakery's marginal and average costs? O Both marginal and average cost curves shift up. O Both marginal and average cost curves shift down. O Marginal cost shifts up, while average cost shifts down. O Marginal cost shifts down, while average cost shifts up.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Confetti Bakery sells bread, cake, and other baked goods. After analyzing their production and costs, management has
determined the business has the following marginal and average cost curves.
AC, MC
B
30
D
MC
AC
60
90
Quantity per time period
Refer to Scenario 8-2. If bad agricultural conditions cause the price of flour, a major input, to rise, what would happen
to the bakery's marginal and average costs?
O Both marginal and average cost curves shift up.
O Both marginal and average cost curves shift down.
O Marginal cost shifts up, while average cost shifts down.
O Marginal cost shifts down, while average cost shifts up.
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