[Related to the Making the Connection on page 371]

According to one account of the problems DuPont had in entering the paint business, “the du Ponts had assumed that large volume would bring profits through lowering unit costs.” In fact, according to one company report,

“The more paint and varnish we sold, the more money we lost.” Draw an average cost curve graph that shows the relationship between paint output and the average cost DuPont expected. Draw another graph that explains the result that the more paint the company sold, the more money it lost.

From Alfred D. Chandler, Jr., Thomas K. McCraw, and Richard Tedlow, Management Past and Present, © 2000 Cengage Learning, Inc.

Reproduced by permission. www.cengage.com/permissions.