Graphs: deciphering Marginals & Averages

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total-output

Have you ever looked at a graph of total output and wondered to yourself:
“Gee, I wonder which level of output would give me the highest average output?”

Or perhaps you looked at a graph of total profit and asked yourself:
“Hmmmm, which unit of output gives me the highest profit from that unit (marginal profit)?”

If you have tried and run into a wall, then fear not!
These questions can be answered with some simple graphical analysis that is firmly rooted in mathematics.

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