Average 214 3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Support Eleen is a professional baletta player and her game log for free throws can be summarized in the following table. Fil in the columns with Eleen's free-throw percentage for each came and her overall from throw average after each cama Game Game Result Total Game Free Throw Percentage Average Free-Throw Percentage 8/10 8/10 4/10 12/20 14/25 30 30 2 4 16/32 22/40 On the following graph, use the orange points (square symbol) to plot Eileen'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 00 30 Game Free-Throw Percentage 70 Average Free-Throw Percentage FREE THROW PERCENTAGE 50 ANE 10 0 0 2 2 GAME GAME You can think of the result in any one game as being Elleen's marginal free-throw percentage. Based on your previous answer, you can deduce that when Eileen's marginal free-throw percentage is below 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