Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ? AVERAGE TOTAL COST (Dollars per shoe) SRATC 560 480 SRATC2 800 720 640 400 320 240 ༔ ༔་༔ ྴ8༔ ༄ 160 80 0 0 100 200 300 400 QUANTITY (Shoes) 500 600 700 SRATC3 LRATC In the following table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or diseconomies of scale for each range of shoe production. Range More than 400 shoes per month Fewer than 300 shoes per month Between 300 and 400 shoes per month Economies of Scale Constant Returns to Scale Diseconomies of Scale 5. Costs in the short run versus in the long run Cloud Nine is a shoe manufacturer in Memphis, specializing in running shoes. Currently, the company produces all of its shoes 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 shoes produced by all factories.) Average Total Cost (Dollars per shoe) Number of Factories = 100 = 200 Q = 300 = 400 Q = 500 = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Cloud Nine is currently producing 500 shoes per month in its only factory. Its short-run average total cost is $ per shoe. Suppose Cloud Nine is expecting to produce 500 shoes per month for several years. In this case, in the long run, it would choose to produce shoes using On the following graph, plot the three SRATC curves for Cloud Nine from the previous table. Specifically, use the green points (triangle symbol) to plot its SRATC curve if it operates one factory (SRATC₁); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories ( SRATC2); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATC 3). Finally, plot the long-run average total cost (LRATC) curve for Cloud Nine using the blue points (circle symbol).