Answer
The average fixed cost curve would move upward uniformly.
The average variable cost curve would remain unchanged.
The average total cost curve would shift upward uniformly.
The marginal cost curve would remain unchanged.
Work Step by Step
Since insurance registers as a fixed cost (contracts are usually long term), an increase in fixed cost would result in the average fixed cost curve to move upward at every level.
Since there are no changes in the variable cost (ceteris paribus), the average variable cost curve will remain unchanged.
The increase in the average total cost is due to the increase in the average fixed cost (total cost is the addition of variable and fixed cost). Since the average fixed cost curve increases uniformly, the total cost curve would also move upward uniformly.
Since the marginal cost curve is derived from the gradient of the total cost curve, and the total cost curve’s gradient remained unchanged (it merely moved downward), the marginal cost curve would remain unchanged as the gradient stays the same.
