Statement I: Under perfect competition, an increase in fixed cost results in an upward shift in AFC and ATC, and there is no effect on AVC and MC.
Statement II: Under perfect competition, an increase in variable cost results in leftward shift in AFC, ATC and MC.
Statement III: Under perfect competition, an increase in variable cost results in upward shift in AFC and ATC, and there is no effect on AVC and MC.
Statement IV: Under perfect competition, an increase in fixed cost results in upward shift in AFC, ATC and MC.
Choose the correct option from those below:
1
Statement I only
2
Statement I and II
3
Statement I, II and III
4
Statement I, II, III and IV