Attempts: Keep the Highest: 14 3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Charles is a professional basketball player, and his game log for free throws can be summarized in the following table. Fill in the columns with Charles's free-throw percentage for each game and his overall free-throw average after each game. Game Game Result Total Game Free-Throw Percentage Average Free-Throw Percentage 8/10 8/10 80 80 4/10 12/20 2/8 14/28 2/4 16/32 6/8 22/40 HW#4 (Costs of Production, Competitive Markets) On the following graph, use the orange points (square symbol) to plot Charles's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot 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. 100 90 Game Free-Throw Percentage 90 70 60 Average Free-Throw Percentage 50 40 30 20 10 GAME You can think of the result in any one game as being Charles's marginal free-throw percentage. Based on your previous answer, you can deduce that when Charles's marginal free-throw percentage is above the average, the average must be. You can now apply this analysis to production costs. For a U-shaped average total cost (ATC) curve, when the marginal cost curve is below the Also, when the marginal cost curve is above the average total cost curve, the average total cost curve, the average total cost must be average total cost must be Therefore, the marginal cost curve intersects the average total cost curve FREE-THROW PERCENTAGE
Attempts: Keep the Highest: 14 3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Charles is a professional basketball player, and his game log for free throws can be summarized in the following table. Fill in the columns with Charles's free-throw percentage for each game and his overall free-throw average after each game. Game Game Result Total Game Free-Throw Percentage Average Free-Throw Percentage 8/10 8/10 80 80 4/10 12/20 2/8 14/28 2/4 16/32 6/8 22/40 HW#4 (Costs of Production, Competitive Markets) On the following graph, use the orange points (square symbol) to plot Charles's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot 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. 100 90 Game Free-Throw Percentage 90 70 60 Average Free-Throw Percentage 50 40 30 20 10 GAME You can think of the result in any one game as being Charles's marginal free-throw percentage. Based on your previous answer, you can deduce that when Charles's marginal free-throw percentage is above the average, the average must be. You can now apply this analysis to production costs. For a U-shaped average total cost (ATC) curve, when the marginal cost curve is below the Also, when the marginal cost curve is above the average total cost curve, the average total cost curve, the average total cost must be average total cost must be Therefore, the marginal cost curve intersects the average total cost curve FREE-THROW PERCENTAGE
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Attempts:
Keep the Highest: 14
3. The relationship between marginal and average costs
Consider the following scenario to understand the relationship between marginal and average values. Suppose Charles is a professional basketball
player, and his game log for free throws can be summarized in the following table.
Fill in the columns with Charles's free-throw percentage for each game and his overall free-throw average after each game.
Game
Game Result
Total
Game Free-Throw Percentage Average Free-Throw Percentage
8/10
8/10
80
80
4/10
12/20
2/8
14/28
2/4
16/32
6/8
22/40
Transcribed Image Text:HW#4 (Costs of Production, Competitive Markets)
On the following graph, use the orange points (square symbol) to plot Charles's free-throw percentage for each game individually, and use the green
points (triangle symbol) to plot 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.
100
90
Game Free-Throw Percentage
90
70
60
Average Free-Throw Percentage
50
40
30
20
10
GAME
You can think of the result in any one game as being Charles's marginal free-throw percentage. Based on your previous answer, you can deduce that
when Charles's marginal free-throw percentage is above the average, the average must be.
You can now apply this analysis to production costs. For a U-shaped average total cost (ATC) curve, when the marginal cost curve is below the
Also, when the marginal cost curve is above the average total cost curve, the
average total cost curve, the average total cost must be
average total cost must be
Therefore, the marginal cost curve intersects the average total cost curve
FREE-THROW PERCENTAGE
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