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Because the owner is worried about the effects of the Covid recession, the owner has decided to hire 20% more labor than cost minimization would
Because the owner is worried about the effects of the Covid recession, the owner has decided to hire 20% more labor than cost minimization would dictate. Assume that at the time of the hiring plan, all inputs are variable. Show how this decision would impact the input choices of the firm, and the effect on the cost curves in a. Be as explicit as possible about the effects on total cost.
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