A Worldwide Hops (A Flowers Used in Brewing) Shortage Will

A worldwide hops (a flowers used in brewing) shortage will make stouts, ales and other specialty microbrews more pricy in 2008. A triple whammy of bad weather in Europe, an increase in the price of barley and a decrease in hops production in the U.S. has led to a price increase of 20 percent for the most widely grown varieties, to 80 percent for specialty hops. What is the effect of this hops shortage on a microbrewery's cost curves?

A) Short run fixed costs would increase.
B) Short run total costs would decrease.
C) Short run average variable costs would decrease.
D) Short run variable costs would increase.

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