Sketch the marginal cost curve for umbra”s umbrella factory/ Econometrics
Producing umbrellas requires inputs of fabric, metal, and labor. Umbra’s Umbrella Factory experiences increasing returns to inputs of labor up to a certain point, and constant returns for all levels of production thereafter. There is no range of diminishing returns at Umbra’s Umbrella Factory.
a. What is the shape of the production function for Umbra’s Umbrella Factory? Sketch (and fully label) it below.
b. Sketch the total cost curve for Umbra’s Umbrella Factory.
c. Sketch the marginal cost curve for Umbra’s Umbrella Factory.
