Afactory has a linear cost function f(x)=ax+b, where b represents fixed costs and a represents the labor and material costs of making one item, both in thousands of dollars.
if property taxes (part of the fixed costs) are decreased by $12,000 per year, what effect does this have on the graph of the cost function?

a.
shifts to the left by 12 units
b.
shifts to the right by 12 units
c. shifts upward by 12 units
d. shifts downward by 12 units

A decrease in total fixed costs would shift the function down.

Step-by-step explanation:

In this equation b (fixed costs) represents the y-intercept of the graph. A decrease in this amount would move the y-intercept down the graph. Also, a decrease in fixed costs would lower the base amount of costs at all level of production.

A.

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