When Carmakers Began to Cut Costs of Producing Cars by Designing

Multiple Choice

When carmakers began to cut costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This change caused car makers' short-run average cost curves to:

A) shift up.
B) shift down.
C) remain unchanged; only the long-run average cost curve was affected.
D) remain unchanged, though there was a movement along the short-run average cost curve.