a) do to adjust scale? Why? b) After 3 years if the demand for your cars starts to increase how would you react? Explain. As the manager of ZAP what would you
a) do to adjust scale? Why? b) After 3 years if the demand for your cars starts to increase how would you react? Explain. As the manager of ZAP what would you
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Company ZAP operates in car industry. When
ZAP operates at full capacity (10.000
cars/month), economies of scale is reached,
and cost/car is minimum. However, due to an
economic crisis, the sales of ZAP decreased
to 6.000 cars/month. Economic forecasts
show that the crises will continue for 2-3
years more.
a) As the manager of ZAP what would you
do to adjust scale? Why?
b) After 3 years if the demand for your cars
starts to increase how would you react?
Explain.
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