Average Total Cost ($ per tablet)Number of FactoriesQ=100Q=200Q=300Q=400Q=500Q=600140030020024030072025403501801602505403.720400170160200360The company, Peleton is a major manufacturer of indoor exercise trainers. Currently the company produces trainers using only one factory. However it is considering expanding production to twoor even three factories. The table above shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equalsthe total quantity of trainers produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Peleton's trainers?The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run.The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run.Peleton experiences diseconomies of scale at any quantity less than 400 trainers.Peleton experiences diseconomies of scale at any quantity over 400 trainers.

Given information Q Factory1 Factory 2 Factory 3 100 400 540 720 200 300 350 400 300 200…

Average Total Cost ($ per tablet) Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 1 400 300 200 240 300 720 540 350 180 160 250 540 3 720 400 170 160 200 360 The company, Peleton is a major manufacturer of indoor exercise trainers. Currently the company produces trainers using only one factory. However it is considering expanding production to two or even three factories. The table above shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equa the total quantity of trainers produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Peleton's trainers? The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run. The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run. Peleton experiences diseconomies of scale at any quantity less than 400 trainers. Peleton experiences diseconomies of scale at any quantity over 400 trainers. O o o

Average Total Cost ($ per tablet) Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 1 400 300 200 240 300 720 540 350 180 160 250 540 3 720 400 170 160 200 360 The company, Peleton is a major manufacturer of indoor exercise trainers. Currently the company produces trainers using only one factory. However it is considering expanding production to two or even three factories. The table above shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equa the total quantity of trainers produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Peleton's trainers? The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run. The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run. Peleton experiences diseconomies of scale at any quantity less than 400 trainers. Peleton experiences diseconomies of scale at any quantity over 400 trainers. O o o

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Average Total Cost ($ per tablet)
Number of Factories
Q=100
Q=200
Q=300
Q=400
Q=500
Q=600
1
400
300
200
240
300
720
2
540
350
180
160
250
540
3.
720
400
170
160
200
360
The company, Peleton is a major manufacturer of indoor exercise trainers. Currently the company produces trainers using only one factory. However it is considering expanding production to two
or even three factories. The table above shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals
the total quantity of trainers produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Peleton's trainers?
The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run.
The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run.
Peleton experiences diseconomies of scale at any quantity less than 400 trainers.
Peleton experiences diseconomies of scale at any quantity over 400 trainers.

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