Average Total Cost ($ per tablet) Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 400 300 200 240 300 720 540 350 180 160 250 540 720 400 170 160 200 360 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 averáge cost curve of Peleton's trainers? Peleton experiences diseconomies of scale at any quantity over 400 trainers. The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run. Peleton experiences diseconomies of scale at any quantity less than 400 trainers. The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run.
Average Total Cost ($ per tablet) Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 400 300 200 240 300 720 540 350 180 160 250 540 720 400 170 160 200 360 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 averáge cost curve of Peleton's trainers? Peleton experiences diseconomies of scale at any quantity over 400 trainers. The long-run average total cost of production per trainer will be $170 when 300 trainers are produced in the long run. Peleton experiences diseconomies of scale at any quantity less than 400 trainers. The long-run average total cost of production per trainer will be $160 when 400 trainers are produced in the long run.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter7: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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