AVERAGE TOTAL COST (Dollars per scooter)8007206405604804003202401608000100200300400QUANTITY (Scooters)500RangeMore than 400 scooters per monthFewer than 300 scooters per monthBetween 300 and 400 scooters per month600700SRATC₁SRATC₂SRATC3LRATC(?)In the following table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or diseconomies ofscale for each range of scooter production.Economies of Scale Constant Returns to Scale Diseconomies of Scale Scooter's Scooters is a large American manufacturer of electric scooters operating out of Boise. Currently, the company produces all of its scootersusing a single manufacturing facility, its factory in town. Recently, management has been considering expanding operations to one or two additionalfactories. The following table presents the manufacturer's monthly short-run average total cost (SRATC) for various levels of production if it operatesout of one, two, or three factories. (Note: Q equals the total quantity of scooters produced by all factories.)Number of Factories Q = 100 Q = 2003605407202200300400Average Total Cost(Dollars per scooter)Q = 300 Q = 400240160160160160240Q = 500400300200Q = 600720540360Suppose Scooter's Scooters is currently producing 500 scooters per month in its only factory. Its short-run average total cost is $per scooter.Suppose Scooter's Scooters is expecting to produce 500 scooters per month for several years. In this case, in the long run, it would choose to producescooters usingOn the following graph, plot the three SRATC curves for Scooter's Scooters from the previous table. Specifically, use the green points (trianglesymbol) to plot its SRATC curve if it operates one factory (SRATC₁); use the purple points (diamond symbol) to plot its SRATC curve if it operatestwo factories (SRATC2); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATC). Finally, plot thelong-run average total cost (LRATC) curve for Scooter's Scooters 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.

For Blank 1 - SRATC will be $720For Blank 2 - 3 (Three) factoriesExplanation:ATC is $720 where no.…

Suppose Scooter's Scooters is currently producing 500 scooters per month in its only factory. Its short-run average total cost is $ per scooter. Suppose Scooter's Scooters is expecting to produce 500 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using

Suppose Scooter's Scooters is currently producing 500 scooters per month in its only factory. Its short-run average total cost is $ per scooter. Suppose Scooter's Scooters is expecting to produce 500 scooters per month for several years. In this case, in the long run, it would choose to produce scooters 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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