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Labor costs represent a large percentage of total costs for many firms. According to a September 1, 2007, Wall Street Journal article, U.S. labor costs were up 0.9 % during the preceding three months and 0.8 % over the three months preceding those. a. When labor costs increase, what happens to average total cost and marginal cost? Consider a case in which labor costs are only variable costs and a case in which they are both variable and fixed costs. An increase in labor productivity means each w
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