The accurate alternative is B. Increase quick-run common expenses and long-run common expenses.
The required details for Short-run expenses in given paragraph
Short-run expenses are those who range with nearly no time lagging. Labor price and the price of uncooked materials are quick-run expenses, but bodily capital is not. An common price curve may be plotted with price at the vertical axis and amount at the horizontal axis. Marginal expenses are regularly additionally proven on those graphs, with marginal price representing the price of the final unit produced at every point; marginal expenses within side the quick run are the slope of the variable price curve A common common price curve has a U-shape, due to the fact constant expenses are all incurred earlier than any manufacturing takes area and marginal expenses are usually growing, due to the fact of diminishing marginal productivity. In this "common" case, for low stages of manufacturing marginal expenses are underneath common expenses, so common expenses are lowering as amount increases.
An growing marginal price curve intersects a U-formed common price curve on the latter's minimum, and then the common price curve starts off evolved to slope upward.
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Complete question
Consider the effect on costs of an increase in wages in an economy. What is the increase likely to do?
a)Increase short-run average costs, but not increase long-run average costs.
b)Increase short-run average costs and long-run average costs.
c)Increase long-run average costs, but not increase short-run average costs.
d)Increase neither short-run or long-run average costs, businesses will use less labor and more capital.
