4.2 Sugar Plum Oak is a company based in Norfolk, NE, that produces handmade Amish furniture.

One of its signature items is handmade rocking chairs. The table provides weekly cost data for handmade rocking chairs.

a. Using the total cost schedule provided, calculate total and average fixed cost and variable cost, average total cost, and marginal cost.

b. Use Excel to graph the ATC, AVC, and MC curves. What does the distance between the ATC and AVC curves represent?

c. Using the same graph, where does the MC curve intersect the ATC curve? What does this point mean to the firm from a cost perspective?

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A B D E 1 Q Total Cost TFC TVC ATC 2 0 525 3 1 552.5 4 2 585 5 3 622.5 6 4 665 7 5 712.5 8 6 765 9 7 822.5 10 8 885 11 9 952.5 12 10 1025 13 11 1102.5 14 12 1185 15 13 1272.5 16 14 1365 17 15 1462.5 18 16 1565 19 17 1672.5 20 18 1785 21 19 1902.5 22 20 2025 23 AFC F G AVC MC H