Assume that a firm uses capital as a fixed factor of production and uses labor as a variable factor. The marginal product of labor at first increases and then decreases with the amount of labor.

(a) Using a correctly labeled graph, draw and identify the form’s average total cost curve (ATC), average variable cost curve (AVC), and marginal cost curve (MC).

d) Draw a long-run average total cost curve that has a region of economies of scale followed by a region of diseconomies of scale, as output increases.

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a The Average Total Cost ATC curve is typically Ushaped starting at a high level f... View the full answer