Question 2: Oscar runs a small coffee shop close to Glenferrie station. In the short run, Oscar will not have the funds to upgrade the coffee shop with additional machines and equipment. The following table shows how the quantity of coffees Oscar can sell per day depend on the number of staff he hires. Oscar pays each staff member $200 per day and the shop's rent is $2100 per month or $70 per day. For the purpose of simplicity, assume wages and rent are the only two costs in Oscar's daily business.

Quantity of staff	Quantity of coffees made	Fixed cost (rent)	Variable cost (wages)	Total cost	Average total cost	Marginal cost
0	0	$70	0	$70	-	-
1	30	$70	$200	$270	$9	$6.66
2	70	$70	$400	$470	$6.71	$5
3	130	$70	$600	$670	$5.15	$3.33
4	170	$70	$800	$870	$5.12	$5
5	200	$70	$1000	$1070	$5.35	$6.66

Use the data from Question 2, to answer the following:

Question 3a.Graph the marginal cost (MC) curve and the average total cost (ATC) curve on a diagram. Remember to label the curves and the axes fully.

Question 3b.State clearly the relationship between marginal cost and average total cost.