Which curves are affected when the price of capital changes?A.ATC and AFCB.ATC, AFC, and MCC.ATC, AFC, MC, and AVCD.ATC, AFC, and AVCE.ATC and AVC

To determine which curves are affected when the price of capital changes, let's analyze the options provided:

1. Average Total Cost (ATC): This curve reflects the per-unit cost of production, which includes both fixed and variable costs. Changes in the price of capital (a fixed cost) will affect the ATC.

2. Average Fixed Cost (AFC): Since AFC is derived from fixed costs (which include capital costs), a change in the price of capital will also affect the AFC.

3. Marginal Cost (MC): Generally, the marginal cost is influenced by variable costs (like labor and materials). However, if the change in the price of capital affects production levels, it could indirectly influence the marginal cost.

4. Average Variable Cost (AVC): The AVC does not include fixed costs, which means a change in the price of capital will not directly affect this curve.

Given this analysis, the curves affected by a change in the price of capital include:

• Average Total Cost (ATC)
• Average Fixed Cost (AFC)
• Possibly Marginal Cost (MC) depending on production decisions.

Relevant Choice

The best choice that captures all directly and potentially affected curves is: B. ATC, AFC, and MC.

This option reflects the changes accordingly when capital price fluctuates.