Question: This is the question A column on barrons.com discussing General Motors (GM) made the following observation: Even the seemingly 'vari- able' costs of hourly workers

This is the question

This is the question A column on barrons.com discussing General Motors (GM)

A column on barrons.com discussing General Motors (GM) made the following observation: "Even the seemingly 'vari- able' costs of hourly workers were made burdensome by union agreements whereby 95% of hourly workers' salaries were paid when they were laid off, turning variable labor compensation into a fixed cost." a. Aren't workers' salaries always a variable cost and not a fixed cost? Briefly explain the author's reasoning. b. Suppose that GM reduces its production of cars. Com- pare what happens to GM's average total cost pro- duction in a situation where (i) the company doesn't have this union agreement, and (ii) the company does have this agreement. Use a graph to illustrate your

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