Average Total Cost ($ per tablet) Q=400 Number of Factories Q=100 Q=200 Q=300 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 Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to tvo or even three factories. The following table 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 bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Ride's bikes? Ride experiences economies of scale at any quantity over 300 bikes. The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run. The long-run average total cost of production per bike will be $160 when 400 bikes are produced in the long run. Ride experiences economies of scale at any quantity less than 400 bikes.
Average Total Cost ($ per tablet) Q=400 Number of Factories Q=100 Q=200 Q=300 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 Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to tvo or even three factories. The following table 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 bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve of Ride's bikes? Ride experiences economies of scale at any quantity over 300 bikes. The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run. The long-run average total cost of production per bike will be $160 when 400 bikes are produced in the long run. Ride experiences economies of scale at any quantity less than 400 bikes.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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