Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expandingproduction to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levelsof production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.)Number of Factories Q = 10012378°FSunny440620800F2Q = 200F3280380480OAverage Total Cost(Dollars per bike)Q = 300 Q = 400240240320F4320240240Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $F5Q = 500480Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikesusingOn the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specifically, use the green points (triangle symbol) to plotits 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 (SRATC3). Finally, plot the long-runaverage total cost (LRATC) curve for Ike's Bikes using the blue points (circle symbol).380280F6Q = 600N800620440F741-per bike.F8F9F10OF11F122Fn omework (Ch 13)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 bike)80072078°FSunny640560480400320240160800100200300400QUANTITY (Bikes)500600700LESSRATCSRATC₂PSRATC3-OLRATCF8&F10EPFn

The short-run total cost (SRTC) and long-run total cost (LRTC) bends are expanding in the number of…

Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two 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.) Number of Factories Q = 100 Q = 200 1 440 2 3 620 800 280 380 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 240 320 320 240 240 Q 500 480 380 280 Q = 600 800 620 440 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ per bike. Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using

Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two 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.) Number of Factories Q = 100 Q = 200 1 440 2 3 620 800 280 380 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 240 320 320 240 240 Q 500 480 380 280 Q = 600 800 620 440 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ per bike. Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two 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.) NOTE: the options for the blank question is this Suppose Ike's Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using _______ (once factory OR two factory OR three factory)
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