Refer to the diagram, which relates to Firm X. Suppose X implements an innovative new production method that shifts its total product curve from TP 2 to TP 1 . Other things equal:

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A. he average product of X’s labor would fall.
B.  the average total cost of X’s output would decline.
C.  X would supply less output at each product price than before.
D.  the demand curve for X’s product would shift to the right.

ANSWER:

B.  the average total cost of X’s output would decline.