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4. The Gruber Umbrella Company manufacturers a high fashion product in its basement factory in Fall River. Gruber pays a wage of $45 a day
4. The Gruber Umbrella Company manufacturers a high fashion product in its basement factory in Fall River. Gruber pays a wage of $45 a day per worker and the cost of capital is $34 per unit. The short- run production function is as follows: Capital K) Workers(L) Umbrellas (TP-Q) 20 20 20 20 20 20 20 20 20 0 15 20 25 30 35 40 0 100 225 375 500 600 675 725 750 a. Graph the APL and MPL curves putting in key values. Where is the point of diminishing returns? b. Compute the AVC, ATC and MC values c. Graph the AVC, ATC and MC results putting in key values d. Where is the breakeven point and shutdown point for Gruber? Indicate on the graph. e. You just received a note from your accountant that she forgot to include the following details 1) Gruber paid $200 to a fashion umbrella designer 2) each umbrella requires $1.20 in waterproof fabric and 3) Due to all the noise from the basement umbrella factory the tenant on the first floor of the building couldn't sleep and moved out. Will this new inforrnation affect your cost analysis? Just explain. No calculations needed
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