Taylor Chemicals produces a particular chemical at a fixed cost of $1,000 per day. The following table displays how marginal cost varies with output (in cases):
| Quantity (Cases) | Marginal Cost |
| 1 | $500 |
| 2 | 400 |
| 3 | 325 |
| 4 | 275 |
| 5 | 325 |
| 6 | 400 |
| 7 | 500 |
| 8 | 625 |
| 9 | 775 |
| 10 | 950 |
Required:
a. Given the preceding data, construct a table that reports total cost and average cost at various output levels from 1 to 10 cases.
b. At what quantity is average cost minimized?
c. Does marginal cost always intersect average cost at minimum average cost? Why?
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