Question

Consider the following scenario to understand the relationship between marginal and average values. Suppose Sam is a professional basketball player, and his game log for free throws can be summarized in the table that follows. Fill n the columns to show Sam?s free-throw percentage for each game and his overall free-throw average. Plot the results for each game and Sam?s overall average free-throw percentage after each game on the following graph. Use the green points (triangle symbol) to plot Sam?s overall average, and use the orange points (square symbol) to plot his result for each game. Line segments will automatically connect the points. Remember to plot from left to right. You can think of the result in any one game as being Sam?s marginal free-throw percentage. Based on your previous answer, you can deduce that when Sam?s marginal free-throw percentage is below the average, the average must be ___________ You can now apply this analysis to production costs. When the marginal cost curve is below the average total cost curve, the average total cost must be . When the marginal cost curve is above the average total cost curve, the average total cost must be ________________ . Therefore, for a U-shaped average total cost curve, the marginal cost curve intersects the average total cost curve .

Answer 1

The free throw percentage is calculated by dividing number of player's throw by total throw multiplied by 100. Similarly, the average throw is done by dividing total number of players throw by total score in all the matches. The table is given below:

No of game	Game free throw percentage	Average free throw percentage
1	75	75
2	25	50
3	50	50
4	80	60
5	80	65

The results in the table above is plotted in the table below

90 80 70 60 50 40 30 20 10 0 0 2 3 4 6 per game throwaverage throw

When the player's marginal free through is below average, the average must be falling.

When marginal cost curve is below the average total cost curve, the average total cost must be falling. When marginal cost curve is above the average total cost curve, the average total cost must be rising. Therefore, for a U-shaped average cost curve the marginal cost curve intersects the average cost curve at minimum average cost..