Question

4. Cost-curve shifters Aa Aa The following graphs depict the costs and expenses in the short run and the long run for Brian's Pizza Place. Brian must pay $200 per month to rent pizza ovens (including sales tax) and $15 per hour for his workers. He also pays a additional $2,000 a month for a license that allows him to sell beer at his pizza parlor. Short Run Long Run DOLLARS DOLLARS OUTPUT OUTPUT Now, suppose the wage Brian must pay his workers increases to $20 per hour. Fill in the following table with information on how each curve is affected, if at all. Short-Run Curve Effect? Long-Run Curve Effect? Marginal cost Average cost Average expenditures Marginal cost Average variable cost Average cost

Please see the highlighted question in Yellow. (Needed to answer the dropdowns)

Please answer the effects at the bottom.

the choices are as follows:

- shift upward

- shift downward

- no change

Answer 1

Answer: W cost-augue shifters - Giren "1 2 a graphs graphs of Costs and expenses in short sun and long run for Brain's pizza place Pays = $200 per month ovens rent Brain workers rent = $15/ how licencse = 82000 a month. If wage Brian must pay to workers increases to 820/ho then values in short hn and longan changes are: → Short run ame effect shifts upwards marginal cost shifts upwards Average cost Average Expenditures Increases. In short nn wage increased ATC, mc, IFC, AFC

→ marginal cost Long Run cane effect No change Average variable cost Nochange Verage cost shift upwards In long son fixed cost does not exist and all costs are Vasiable, so no impact on variable cost