116
Question
If a firm's cost of raw material decreases then _________.
If a firm's cost of raw material decreases then _________.
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Solution
The correct option is A marginal cost curve will shift downward
The marginal costs are directly linked with variable costs thus if the variable costs, such as raw materials, falls the marginal cost is likely to fall as well and thus the MC curve will shift downwards.
The marginal costs are directly linked with variable costs thus if the variable costs, such as raw materials, falls the marginal cost is likely to fall as well and thus the MC curve will shift downwards.
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