Question

Which of the following statements about a firm's average cost curves is false?

Q: Answer-Which of the following statements about a firm's average cost curves is false?

Statement a is false. A rise in the price of a fixed input increases a firms total costs, even though it cannot alter the quantity of this input that it uses in the short run. As its total cost for each output level increases, the average cost of each output level increases, so its SAC curve shifts upwards.