This is the cost structure from Chapter 9: fixed cost $100, average variable cost bottoming at $40, and average total cost bottoming at $64 (at 5 units). Slide output and see marginal cost (MC), average total cost (ATC), average variable cost (AVC), and average fixed cost (AFC). Notice that MC cuts through the bottom of both AVC and ATC, and that ATC and AVC squeeze together as fixed cost spreads thin.