3. The relationship between marginal and average costs The following scenario examines the relationship between marginal and average values. Suppose Jelani is a high school basketball player. The following table presents their game-by-game results for foul shots. Fill in the columns with Jelani's foul-shooting percentage for each game and their overall foul-shooting average after each game. Game Game Result Total Game Foul-Shooting Percentage Average Foul-Shooting Percentage 1 8/10 8/10 80 80 2 6/10 14/20 3 1/5 15/25 4 3/5 18/30 5 8/10 26/40 On the following graph, use the orange points (square symbol) to plot Jelani's foul-shooting percentage for each game individually, and use the green points (triangle symbol) to plot Jelani's overall average foul-shooting percentage after each game.Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 6') 100 -I- 90 so __ Game FoulShooting Percentage TO A an __ Average Foul-Shooting Percentage 40 30 FREETl IROW PERCENTAGE U'I O 20 10 You can think of the result in any one game as being Jelani's marginal shooting percentage. Based on your previous answer, you can deduce that when Jelani's marginal shooting percentage is below the average, the average must be V . You can now apply this analysis to production costs. For a Ushaped average total cost (ATE) curve, when the marginal cost curve is below the average total cost curve, the average total cost must be V . Also, when the marginal cost curve is above the average total cost curve, the average total cost must be V . Therefore, the marginal cost curve intersects the average total cost curve V . You can think of the result in anyr one game as being Jelani's marginal shooting percentage. Based on your previous answer, you can deduce that when Jelani's marginal shooting percentage is below the average. the average must be v . You can now apply this analysis to production costs. For a Ushaped average tota total cost curve, the average total cost must be V . Also, when the mar curve is above the average total cost curve, the average n'sing falling C} curve, when the marginal cost curve is below the average .r- .I total cost must be v . Therefore, the marginal cost curve intersects the - total cost curve v . You can think of the result in any' one game as beinl Jelani's marginal shooting percentage. Based on your previous answer, you can deduce that when Jelani's marginal shooting percentage is belowt fa||mg Ie. the average must be V . total cost curve, the average total cost must be V . Also, when the marginal cost curve is above the average total cost curve, the average You can now apply this analysis to production c: Ushaped average total cost (ATC) curve, when the marginal cost curve is below the average total cost must be V . Therefore, the marginal cost curve intersects the average total cost curve V . You can think of the result in any one game as being Jelani's marginal shooting percentage. Based on your previous answer, you can deduce that when Jelani's marginal shootin- Iercentage is below the average, the average must be V . falling total cost must be V . Therefore, the marginal cost curve intersects the average total cost curve V . You can now applyr vsis to production costs. For a Ushaped average total cost (ATC) curve, when the marginal cost curve is below the average total cost curve, t e total cost must be V . Also, when the marginal cost curve is above the average total cost curver the average 4. Various measures of cost Suppose the imaginaryr companiyr of Athena is a small, Rochesterbased American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 0 1 20 E \\:| E 1 210 E :l E E E 2 m E :l E E E 3 315 E :l E E E 4 380 E :l E E E 5 41' :l E E E On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $210, so you should start your ATC curve by placing a green point at (1, 210). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $90, so you should start your MC curve by placing an orange square at (0.5, 90).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 240 210 ATC 180 150 AVC COSTS ( Dollars per pair) 120 90 MC 60 30 2 3 5 QUANTITY (Pairs of boots)