\begin{tabular}{l} The government imposes a \$1,QQQ per year license fee on all pizza \\ restaurants. As a result, which cost curves shift? \\ \hline OA) average total cost and marginal cost \\ \hline OB) average total cost and average fixed cost \\ \hline OD) average variable cost and marginal cost \\ \hline\end{tabular}

When the government imposes a fixed fee, such as a license fee, it affects the overall cost structure of the pizza restaurants. The average total cost (ATC) curve will shift upward since the fixed cost is now a part of the total cost, distributed over the quantity of pizzas produced. This fixed cost also affects average fixed cost (AFC), which will increase while average variable cost (AVC) remains unchanged. So, if you’re crunching numbers, don’t forget that direct costs incurred for permits and licenses will reflect in your price setting! It’s often a common oversight to think fixed costs don’t matter in your per-unit pricing strategy, but they absolutely do!