A. Upward shifts of MC and reductions in output B. Increased demand for the good the input is used for C. Downward shifts of MC and reductions in output D. Downward shifts of MC and increases in output E. Upward shifts of MC and increases in output
If the production costs: materials, labour etc go up then the profit margin wil be negatively affected. This won't have an effect upon demand for the goods unless the end price is increased as result of the increased input costs. The rate of work and output speed may stay the same if there are changes in incentive for workers. Otherwise the output will lessen.
Input costs can include materials, labor, fees, and other expenses. Output is the finished product. MC stands for marginal costs. If a company is spending more on their input costs, such as salaries or new machinery, there will be a decrease in the output profits.
Marginal cost, that is the cost of making one item, will increase as well. Many factors play into this equation and it can fluctuate due to these varying costs. If input costs are increasing, the marginal costs are directly tied to it so it would naturally increase.