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| An increase in the input prices of the firm leads to |
upward shift of MC curve leftward shift of supply curve increase in average cost all of above |
| all of above |
| If the price of an input (say, the wage rate of labour) increases, the cost of production rises. The consequent increase in the firms average cost at any level of output is usually accompanied by an increase in the firms marginal cost at any level of output; that is, there is a leftward (or upward) shift of the MC curve. This means that the firms supply curve shifts to the left. |
