Author Question: Refer to Figure 12-5. If the firm's fixed cost increases by 1,000 due to a new environmental ... (Read 109 times)

craiczarry · **on:** Jun 29, 2018

Refer to Figure 12-5. If the firm's fixed cost increases by 1,000 due to a new environmental regulation, what happens in the diagram above?

A) Only the average variable cost and average total cost curves shift upward; marginal cost is not affected.
B) All the cost curves shift upward.
C) Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.
D) None of the curves shifts; only the fixed cost curve, which is not shown here, is affected.

Question 2

A significant downside to network externalities is that

A) firms may network with unethical suppliers or distributors.
B) there may be large switching costs to firms changing technologies.
C) there may be large switching costs to consumers of changing products so that consumers end up using products with inferior technologies.
D) the costs of using celebrity endorsements may be very high.

alvinum · **Reply #1 on:** Jun 29, 2018

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