3 The Relationship Between Marginal And Average Costs Consider The Following Scenario To Understand The Relationship Be 1 (26.68 KiB) Viewed 40 times
3 The Relationship Between Marginal And Average Costs Consider The Following Scenario To Understand The Relationship Be 2 (30.49 KiB) Viewed 40 times
3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Paolo is a professional basketball player, and his game log for free throws can be summarized in the following table FW in the columns with Paolo's free-throw percentage for each game and his overall free-throw average after each game. Game Game Result 8/10 Game Free-Throw Percentage Average Free-Throw Percentage 80 80 1 2 6/10 Total 8/10 14/20 15/25 18/30 3 1/5 4 3/5 5 B/10 26/40 On the following graph, use the orange points (square symbol) to plot Paolo's free-throw percentage for each game individually, and use the green points (triangle symbol to pior his overall average free-throw 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
0 Homework/Ch 13) 160 O 90 Game Free-Throw Percentage 80 70 00 Average Free-Throw Percentage FREE-THROW PERCENTAGE 50 40 30 25 10 0 GAME You can think of the result in any one game as being Paolo's marginal free-throw percentage. Based on you can deduce that at its maximum when Paolo's marginal free throw percentage is below the average, the average must be at its minimum You can now apply this analysis to production costs. For a U-shaped average total cost (ATC) curve, when s below the average when the ATC is at 0 total cost curve, the average total cost must be Also, when the marginal cost curve Is above urve, the average total cost must be Therefore, the marginal cost curve intersects the average total cost curve
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