Same average cost with different quantities? suppose there are two pencil producers with identical production facilities—identical factories and equipment. the firms pay the same wages and pay the same prices for materials. sam has a small workforce and produces 500 pencils per minute; marian has a medium-size workforce and produces 1,000 pencils per minute. the two firms have the same average total cost of 5 cents per pencil. suppose you build a production facility identical to the ones used by the other firms and hire enough workers and buy enough materials to produce 1,500 pencils per minute. you expect your average cost to begreater than5 cents per pencil.