Question

Explain for what situation an increase in the price of a input, will not increase the...

Explain for what situation an increase in the price of a input, will not increase the price of the firms cost curve.

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Answer #1

it can be mentioned that when there are perfect substitute then increase in price of input will not increase the price of firms cost curve analysis and this is because if the price of input increases consider labor price increases and then there's a perfect substitute capital where labor can be replaced by capital so that the cost of producing will not increase what the quantities of input can change and that is the reason why you have to understand that this is one way you can not increase the cost of firm on the whole.

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