1. Allstate Heating Company has $12,000 fixed costs each week. Its total variable costs change as the number of water heaters produced each week changes, as follows: (30 points)

Water Heaters	Total Variable Cost
1	$600
2	1,800
3	3,600
4	6,000
5	9,000
6	12,600
7	16,800
8	21,600
9	27,000
10	33,000

1. For each level of output, calculate total cost, marginal cost, average fixed cost, average variable cost and average total cost. (10pt)
2. Using Microsoft Excel, create one graph showing the marginal cost, average fixed cost, average variable cost and average total cost. (10pt)
3. Explain why the average total cost curve has a U shape, when neither of its components, average fixed cost nor average variable cost, does. (5pt)
4. Allstate paid $5,000 for researching the area before setting up its business location. How does this cost figure into its costs of production? (5pt)