Use the Following Statements to Answer This Question: I

Multiple Choice

Use the following statements to answer this question: I. Under perfect competition, an upward shift in the marginal cost curve (perhaps due to a higher price for a variable input) also shifts the average variable cost curve upward.
II) Under perfect competition, an upward shift in the marginal cost curve (perhaps due to a higher price for a variable input) reduces firm output but may increase firm profits.

A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.