Final answer:
The question pertains to graphing the average total cost (ATC) and average variable cost (AVC) curves, both fundamental microeconomic concepts. Each curve is U-shaped and represents costs per unit of output. The ATC curve includes both fixed and variable costs, while the AVC curve includes only variable costs and lies below the ATC curve.
Step-by-step explanation:
The student's question involves graphing the average total cost (ATC) and average variable cost (AVC) curves which are key concepts in microeconomics, particularly within the cost theory of firms. The ATC curve and AVC curve represent the cost per unit of output, with the ATC including all costs (fixed and variable), and the AVC including only variable costs. Both curves are typically U-shaped due to economies and diseconomies of scale.
To graph the ATC, you would divide the total cost by the quantity of output to get the cost per unit of output. The ATC curve usually starts high, decreases as output increases due to spreading the fixed costs over more units (economies of scale), then eventually rises again due to inefficiencies that occur at higher levels of output (diseconomies of scale).
The AVC is obtained by dividing the variable cost by the quantity of output. Since fixed costs are not included, the AVC curve lies below the ATC curve. It has a similar U-shape because it also benefits from spreading variable costs over more units but eventually increases due to the same inefficiencies.
It's also important to note that you would not typically graph the total costs along with these per-unit costs because they would distort the graph scale making the per-unit costs appear almost flat.