Say a firm has $100 in fixed costs and its average variable costs increase by $5 for each unit, so that the cost of 1 is $25, the cost of 2 is $30, the cost of 3 is $35, and so on.

a. Show VC, AFC, AVC, and MC in a table.

b. Graph the AFC, ATC, AVC, and MC curves associated with these costs.

c. Explain how costs would have to increase in order for the curves to have the “normal” shapes of the curves presented in the text.