2. How does marginal physical product impact total product and average product? When marginal product increases, the total product, and average product also increases. The same applies when marginal product decreases, the total product and average product decline too. If the marginal is equal to the average, then the average does not change. 1. What observation can you make in regard to how total cost and total variable cost are related? What is the difference between these two costs? What does that dollar amount represent? The total cost is always 800 dollars more than the value of the total variable cost. This amount of 600 represents the total fixed cost. Sense its fixed, it stays the same meaning the difference between total cost and total variable cost will always be 800 4. The module showed that the AVC curve should take on a u-shape. Do your figures above reflect this? How is the change in productivity responsible for this? 5. The module showed that the AFC curve should decrease as production expands. Do your figures above reflect this? Why is this true? Marginal cost should during the period of increasing marginal returns and during the period of diminishing marginal returns.