3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Ginny is a professional basketball player, and her game log for free throws can be summarized in the following table. Fill in the columns with Ginny's free-throw percentage for each game and her overall free-throw average after each game. Game Game Result Game Free-Throw Percentage Average Free-Throw Percentage 8/10 8/10 12/20 Total 1 80 80 4/10 w 2/8 14/28 4 274 16/32 22/40 5 6/8 On the following graph, use the orange points (square symbol) to plot Ginny's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot her 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 Porcentage 50 A- Average Free-Throw Percentago FREE-THROW PERCENTAGE e 8 392 10 0 GAME You can think of the result in any one game as being Ginny's marginal free throw percentage. Based on your previous answer, you can deduce that When Ginny'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 average total cost curve, the average total cost must be Also, when the marginal cost curve is above the average total cost curve, the average total cost must be Therefore, the marginal cost curve intersects the average total cost curve