Question

The government imposes a $1,000 per year license fee on all pizza restaurants. Which cost curves shift as a result? Select one: a. average total cost and average fixed cost. b. average total cost and marginal cost. c. average variable cost and marginal cost. d. average variable cost and average fixed cost.

Answer 1

Answer:

correct option is a. average total cost and average fixed cost.

Explanation:

given data

license fee  = $1,000 per year

solution

we know that cost curves shift will be express as when the increase in the price of factor of production increase cost and shift cost curves upward

so cost curves shift by the average total cost and the average fixed cost

so here correct option is a. average total cost and average fixed cost.