3. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicydes. Currently, the company produces bikes using only one factory. Howe production to two or even three factories. The following table shows the company's short-run average total cost (SRA of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factor Average Total Cost (Dollars per bike) Number of Factories Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 %3D 1 440 320 240 320 480 720 580 400 240 240 400 580 720 480 320 240 320 440 Suppose Ike's Bikes is currently producing 125 bikes per month in its only factory. Its short-run average total cost is S Suppose Ike's Bikes is expecting to produce 125 bikes per month for several years. In this case, in the long run, it woul using On the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specifically, use the green E its SRATC curve if it operates one factory (SRATC1); use the purple points (diamond symbol) to plot its SRATC curve ifA SRATCa- and use the orange noints (saurare symbo/) to plot its SRATC CUrve if it anerates three factories (SRATC) 2. 3.

3. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicydes. Currently, the company produces bikes using only one factory. Howe production to two or even three factories. The following table shows the company's short-run average total cost (SRA of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factor Average Total Cost (Dollars per bike) Number of Factories Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 %3D 1 440 320 240 320 480 720 580 400 240 240 400 580 720 480 320 240 320 440 Suppose Ike's Bikes is currently producing 125 bikes per month in its only factory. Its short-run average total cost is S Suppose Ike's Bikes is expecting to produce 125 bikes per month for several years. In this case, in the long run, it woul using On the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specifically, use the green E its SRATC curve if it operates one factory (SRATC1); use the purple points (diamond symbol) to plot its SRATC curve ifA SRATCa- and use the orange noints (saurare symbo/) to plot its SRATC CUrve if it anerates three factories (SRATC) 2. 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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11. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 260 330 400 1 2 3 Q = 200 200 240 280 Average Total Cost (Dollars per bike) Q = 300 = 400 160 160 200 200 160 160 = 500 280 240 200 = 600 400 330 260 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ per bike. Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using On the following graph, plot the three short-run average total cost…
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3. Costs in the short run versus in the long run Scooter's Scooters is a large American manufacturer of electric scooters operating out of Boise. Currently, the company produces all of its scooters using a single manufacturing facility, its factory in town. Recently, management has been considering expanding operations to one or two additional factories. The following table presents the manufacturer's monthly short-run average total cost (SRATC) for various levels of production if it operates out of one, two, or three factories. (Note: Q equals the total quantity of scooters produced by all factories.) Number of Factories Q = 100 Q = 200 1 440 is 2 3 620 800 per scooter. 280 one factory 380 480 Average Total Cost (Dollars per scooter) Q = 300 = 400 240 320 240 240 240 320 Q = 500 480 380 280 Q = 600 800 Suppose Scooter's Scooters is currently producing 600 scooters per month in its only factory. Its short-run average total cost 620 440 Suppose Scooter's Scooters is expecting to produce…
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