Question: Explain how the events listed in a. through d. would affect the following costs of a firm producing cups: 1. Marginal cost 2. Average variable

Explain how the events listed in

a. through

d. would affect the following costs of a firm producing cups:

1. Marginal cost 2. Average variable cost 3. Average fixed cost 4. Average total cost

a. Following the burst of a housing market boom, the cost of renting the warehouse significantly decreases.

b. The cost of clay used to make the cups goes up.

c. The manager decides to replace all the existing machinery with new and expensive equipment.

d. The manager decides to invest more in public relations to increase the firm’s presence in the souvenirs’ market.

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