JAMB Economics 2014 Objective — Question 41

Question 41 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2014 Objective paper, with the correct answer and a full explanation.

The short-run average variable cost of a firm will rise owing to

A. the building of new warehouses
B. an increase in the cost of labourCorrect
C. an increase in the salaries of directors
D. the expansion of factory space

Explanation

Cost of labour is a variable cost. An increase in the cost of labour will cause an increase in the short run-average cost.

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