Labor:	0	1	2	3	4	5	6	7	8	9
Output:	0	3	12	30	60	85	105	120	130	135

In this scenario, since we only have two inputs (Capital and Labor), and since the amount of capital is fixed, the cost of total cost capital would also be Total Fixed Cost (TFC) and since labor is variable, the total cost of labor would be Total Variable Cost (TVC). In that context, assume that the cost of capital is $30 per unit per period, while the cost of labor (or wage rate) is $15 per unit of labor per period.

(a) Use this information set up a diagram (i.e., an excel chart) that shows total cost (TC) and total variable cost (TVC) of the firm per period in the short run with the level of output on the horizontal axis.

(b) Also, use this information to then set up another diagram showing the firm's short run marginal cost (MC), average total cost (ATC), and average variable cost (AVC), with output on the horizontal axis (For the marginal cost, remember that when you graph marginal values you should always put them in the middle of the horizontal range that they are calculated over).

(c) provide an explanation about the relationship between marginal cost (MC), average total cost (ATC), and average variable cost (AVC).

Cost implications of the short-run production schedule where capital was fixed at 2 units of output.

Capital
Labor	0	1	2	3	4	5	6	7	8
0	0	0	0	0	0	0	0	0	0
1	0	1	3	7	12	18	21	23	24
2	0	3	12	30	60	85	105	120	130
3	0	7	30	85	105	120	150	180	210
4	0	12	60	105	130	210	280	340	380
5	0	18	85	120	210	410	500	570	620
6	0	21	105	150	280	500	700	850	950
7	0	23	120	180	340	570	850	1100	1300
8	0	24	130	210	380	620	950	1300	1500
9	0	24	135	230	410	660	1000	1400	1600