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 Mesa. 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.) Average Total Cost (Dollars per scooter) Number of Factories Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 1 260 200 160 200 280 400 2 330 240 160 160 240 330 3 400 280 200 160 200 260 Suppose Scooter's Scooters is currently producing 125 scooters per month in its only factory. Its short-run average total cost is $ per scooter. Suppose Scooter's Scooters is expecting to produce 125 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using
Costs in the short run versus in the long run Scooter’s Scooters is a large American manufacturer of electric scooters operating out of Mesa. 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 Average Total Cost (Dollars per scooter) Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 1 260 200 160 200 280 400 2 330 240 160 160 240 330 3 400 280 200 160 200 260 Suppose Scooter’s Scooters is currently producing 125 scooters per month in its only factory. Its short-run average total cost is $ per scooter. Suppose Scooter’s Scooters is expecting to produce 125 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using .Costs in the short run versus in the long run Scooter's Scooters is a large American manufacturer of electric scooters operating out of Mesa. 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.) Suppose Scooter's Scooters is currently producing 125 scooters per month in its only factory. Its short-run average total cost is per scooter. Suppose Scooter's Scooters is expecting to produce 125 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using
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