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: PLOT POINTS PROPERLY AND write the x and y coordinates to each point after NOTE: Options to blank question is 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 ______ (One factory OR two factory OR three factory) CENGAGE MINDTAPAssignment 4 - Part 1 of 4 - Chapter 13 Questions720400240160200360Suppose Ike's Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost isper bike.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 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 if it operates one factory (SRATC1), use the purple points (diamond symbol) to plot its short-run average total cost if it operates twofactories (SRATC2), and use the orange points (square symbol) to plot its SRATC if it operates three factories (SRATC3). Finally, plot the long-runaverage total cost (LRATC) for Ike's Bikes using the blue points (circle symbol).Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.800A720640SRATC,560480SRATC,400320SRATC,240160LRATC80100200300400500600700QUANTITY OF OUTPUT (Bikes)RangeEconomies of ScaleConstant Returns to ScaleDiseconomies of ScaleBetween 300 and 400 bikes per monthFewer than 300 bikes per monthMore than 400 bikes per monthAVERAGE TOTALCOST (Dollars per bke) 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.)Average Total Cost(Dollars per bike)Number of FactoriesQ = 100Q = 200Q = 300Q = 400Q = 500Q = 600136020016024040072025403001601603005403720400240160200360Suppose Ike's Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is Sper bike.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 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 if it operates one factory (SRATC1), use the purple points (diamond symbol) to plot its short-run average total cost if it operates twofactories (SRATC2), and use the orange points (square symbol) to plot its SRATC if it operates three factories (SRATC3). Finally, plot the long-runaverage total cost (LRATC) for Ike's Bikes using the blue points (circle symbol).Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.800720640SRATC,580480SRATC,400320SRATC,240160LRATC80100200300400500600700QUANTITY OF OUTPUT (Bikes)AVERAGE TOTALCOST (Dollars per bke)

Suppose Ike's bike is presently producing 500 bikes per month in its only factory. its short run…

Answered: Ike's Bikes is a major manufacturer of…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC